I upgraded from a 3rd generation i5 (3570k) to 7th gen i5 (7600k) and the difference is huge. Especially when you consider overclocking which your current CPU doesn't support (apart from boost clock)
I was in a similar situation to you but I thought that an i7 would be a little too much, the price wasn't worth the advantages the i7 has. The i5 counterpart of that cpu you mentioned will give similar performance in gaming and even more when overclocked.
So yeah upgrading will cost you, I spent over 650USD for The motherboard, CPU and ddr4 ram, but it was definitely worth it for the performance I got.
And also If you are thinking about the coffee lake CPU's I would personally wait. The prices for their CPU's compared to their previous...