For me money is not an object and I actually decided on the i7. Multiple reviews have shown that there is basically no performance difference between the two processors, and then it makes no sense to spend $500 on the i9.
This is a typical example of people being scared that they might be missing out by only getting the i7 - But when tests show that there is barely any difference, then that should be enough to decide. Ram and GPU is different in the way that those two are usually the biggest limitations when a computer grows old. Ram can thankfully be upgraded in the iMac so that is not an issue. The GPU though is what I would always go for the biggest option available if it provides a decent performance increase. Tests of the 5700 XT compared to the regular 5700 shows 15-20% performance difference, in which case it's definitely worth it to get.
People tend to greatly overestimate how much CPU power they need. For 99,9% of all use-cases, the CPU is never the limiting factor. I'm definitely what you would call a power user - I do everything from video editing, photography, development, security research running multiple VM's, some 3D modeling and I tend to have chrome running with 500+ tabs opened for months at a time. I also like to play games once in a while. Currently I'm running a 2013 iMac. The big limitation in that machine is not the CPU, but the GPU and partially the SSD speed. Sure a new CPU will be faster, but unless a task really uses all cores for an extended period you will only feel tiny differences.
You have to keep in mind that the CPU rarely runs anywhere close to 100% and rarely uses all cores, which is why a theoretical CPU increase has very little every day effect. And when the i7 gives you more or less identical performance to the i9, then paying $500 for the i9 seems silly. But upgrading the GPU on the other hand, that will definitely make a huge difference for the longevity of the machine.
A lot of things that used to be CPU based is also being moved to the GPU today, which is why it makes a bigger difference. Video rendering, 3D rendering and a lot of other stuff is offloaded to the GPU and also the T2 chip(for HEVC).
People are thinking so much about the i9 because in their mind it has 20% more cores and therefor should be quite a lot faster than the i7. But this is why we have benchmarks and real-world testing - Because performance is not a linear thing.