Hmm, I'd like to see benchmarks between Atom and the M3, I'm curious how much of a tradeoff the M3 is versus the i5/i7. If I'm going to take a big hit to go fatness then I would probably just consider going back to the surface 3 and getting better battery life. Can't you get the surface 3 with better configurations than the M3 SP4? More ram/HD?
For me though I might go for the i7 as the GPU has 64mb of edram and is supposed to make a big difference in graphics. My dream of playing some games on my SP's is coming closer, although my SP3 did a pretty decent job of it.
From what I gather, the M3 sits between the Atom and the i5 in performance, basically replacing the i3 Y processors in the Skylake lineup. It's a faster machine overall, especially compared to my Surface 3, but with most of the same perks. The one biggest advantage I think I'll see, besides a slight boost in graphics performance, is much, much better SSD read/write performance. I'm thinking this is the reason why all those updates took a little over an hour to do when I first turned on the machine.
And no, the highest end configuration you can get from the S3 is the 128GB/4GB setup I've got.
Though if you want pure power, GPU, CPU, and all, then yeah, the new i7 is the way to go. It's using a proper Iris Pro this go round, which'll put it more in line with the 13" MBP. I bet that with it docked and cooled, you'll be able to play the latest and greatest on medium settings at 1280x720 ~30 FPS.