If we look at this series there is one i5 system which is faster than yours 3.1 GHz. In addition we can see there is a i7 3.4 GHz as well. So I would just go to the i7 (I7-2600) CPU if you really want to upgrade this system.
But! Before you do lets look at what you are running here as maybe the CPU is not the bottleneck!
What are you using the system for? Please fill us in here as that can help us figure out whats best here. Are you have a given problem? Explain.
What is the amount of RAM do you have in the system? Also what is your storage presently? Do you have a dual drive config (adding a SSD)? Both of these will offer more benefit than swapping out the CPU for most.
As to going with a newer CPU design (Haswell or Skylake) that is just not possible ;-{ The socket is radically different for these newer CPU designs.
Surprisingly, I don't think the i7 CPU upgrade will offer that much improvement! This gets into the limits of multi threading.
Post editing programs are still limited as you are modifying/combining streams into a single file. So the i5's four cores (four threads) is enough for most editing, the i7 still has the same four cores it just offers a way to virtualize each of these cores into a second set of threads (hyper-threading) so you get effectively 8 threads. But, if the app you are using can't leverage these threads then you are only getting the CPU speed bump here from 2.7 GHz to 3.4 GHz. While it's a fair amount of boost only lengthly processes will see the improvement.
I would go with adding the SSD here as the better direction! Following this IFIXIT guide: Installing iMac Intel 27" EMC 2429 Dual Hard Drive Kit You'll gain the bigger bang! If you can swing it go with a 1 TB drive. Once you have it installed prep it up as your boot drive and copy off from your HD (using Migration assistant) every thing over then delete from the SSD the older stuff leaving what you are working on. Switch the boot drive to the SSD and you're done!
The SSD being the boot drive will speed up booting and being the base drive all of the app caching will be sped up! Use it for your work space and then save your completed projects to the HD. Don't forget to get an external backup drive as you don't want to loose your stuff!
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Here is your systems series: iMac12,2
by Dan