Well, obviously WoW will look fantastic on the iMac. Since it really doesn't require much graphics at all.
And it's hard to tell. I myself, am not a PC gamer, I just play on my 360. MW2, FTW
But, Macs are better at multitasking than PCs are. They even run Windows better than a PC with the same exact specs as a Mac.
Why? I don't know.. some people may know, but I don't.
Now, to answer that last question, like I said, it does multitask better, so the game won't lag. And it really depends on what you're playing. Right now, that iMac will play any game that you throw at it.
The video card may not the be hottest or the newest, but it still does the job very well.
My brother has a PC that has that same type of card, that's one gen lower It think, and he's able to play Crysis, I think in the highest quality, or something very close to it.
Also, if a nVidia 9400/9600, right at this moment, can play pretty much any game you throw at it, I think you're good to go.
And like you said, you mostly only play WoW, so if you ever want to play something else on it, for the next few years you should be able to.
Since that card isn't terrible at all. It's not even really that old either.
Sorry, I hope this is helpful. I'm really not a big gamer. Especially on a computer