Do you think it would be possible for the high end 21.5" to carry an i5 (standard or upgrade)?
As an upgrade, yes. Either 650 (3.2GHz) or 660 (3.33GHz), that's up to Apple. Maintaining the same clock speeds (3.06GHz as default and 3.33GHz as an upgrade) seems logical to me, because people could be confused with lower clocked models plus 3GHz is somehow a mystical line. If Apple did that, they could use the same 200$ upgrade price or even lower it to 150$ or so (as 660 is only 86$ more than 530 while E8600 is 133$ more than E7600)