You've got a lot to learn about emulators 
Fortunately you're asking the right person.
CPU bound means the CPU is the limiting factor of your performance, aka a bottleneck. GPU bound means the same: the GPU is the bottleneck for the system. In Dolphin, the GPU is responsible for IR and AA (Internal Resolution and Anti-Aliasing respectively). If you have a CPU bottleneck, that means your GPU is sufficient to handle whatever IR and AA you have set, but the CPU is slowing down the rest of Dolphin's emulation. When you only have a CPU bottleneck, turning down the IR and AA will have no effect of speed, since neither are the cause of the slowdowns. A GPU bottleneck means that your IR and AA are too high for your GPU to handle without slowing down Dolphin's emulation. Unlike modern PC games (which chiefly rely on the GPU generally for the bulk of their performance) Dolphin is generally very reliant on the CPU for the bulk of its performance.
Dolphin is largely a dual-core application, that is to say it dedicates two main threads to do the majority of its processing. You can use a third thread with LLE audio and DSPLLE on a separate thread (but again, it may freeze Wind Waker and Twilight Princess), so at most it will use three cores. The difference between an i5 and an i7 (same microarchitecture e.g Sandy Bridge and at the same clock) is going to be extremely negligible, if noticeable at all. Dolphin also doesn't account for hyper-threading. So in short, our systems are nearly identical in terms of playing Dolphin. We should be getting similar results at any rate; any data I compile will be directly applicable to your situation.
Anyway, have you tried OpenGL + Vertex Streaming hack yet? Even on stock, you shouldn't be getting issues with speed though, at least not in Ordon village. Additionally, are you using the Wii or GC version?
Fortunately you're asking the right person.CPU bound means the CPU is the limiting factor of your performance, aka a bottleneck. GPU bound means the same: the GPU is the bottleneck for the system. In Dolphin, the GPU is responsible for IR and AA (Internal Resolution and Anti-Aliasing respectively). If you have a CPU bottleneck, that means your GPU is sufficient to handle whatever IR and AA you have set, but the CPU is slowing down the rest of Dolphin's emulation. When you only have a CPU bottleneck, turning down the IR and AA will have no effect of speed, since neither are the cause of the slowdowns. A GPU bottleneck means that your IR and AA are too high for your GPU to handle without slowing down Dolphin's emulation. Unlike modern PC games (which chiefly rely on the GPU generally for the bulk of their performance) Dolphin is generally very reliant on the CPU for the bulk of its performance.
Dolphin is largely a dual-core application, that is to say it dedicates two main threads to do the majority of its processing. You can use a third thread with LLE audio and DSPLLE on a separate thread (but again, it may freeze Wind Waker and Twilight Princess), so at most it will use three cores. The difference between an i5 and an i7 (same microarchitecture e.g Sandy Bridge and at the same clock) is going to be extremely negligible, if noticeable at all. Dolphin also doesn't account for hyper-threading. So in short, our systems are nearly identical in terms of playing Dolphin. We should be getting similar results at any rate; any data I compile will be directly applicable to your situation.
Anyway, have you tried OpenGL + Vertex Streaming hack yet? Even on stock, you shouldn't be getting issues with speed though, at least not in Ordon village. Additionally, are you using the Wii or GC version?