Can you swap it? Yes. Will it work? probably not. The main board is only designed to support and supply 35w power, and the cooling solution is in the same boat. Not to mention the bios is designed for dual core cpu's and there is a chance it won't detect or support the i5 or even an i7.
You may be able to find a custom bios, and ways to get more power to the socket but for the money and effort just buy a better laptop. Even chromebooks or 2-1 notebooks would offer better performance for the money. For $199 to $299 (Canadian pesos) there are lots of options out there that will be a better solution then trying to upgrade the laptop.
So in closing, not only will the i5 you mentioned work, but also even faster i7 processors--and all were at some point vetted and tested by Acer so it should be a simple plug and play affair. Happy upgrading!