Thank you so much for the detailed reply!
I was being dumb and assuming all devices were direct playing because all the devices in my home do but after checking, there are a few external users with hardware that wasn't direct playing - probably why my CPU is having a hard time. I think I can safely make the assumption that the split between direct playing and transcoding is 50/50. Thank you for the advice about the passmarks - I'll use that as a rough guide in future!
With those updated requirements though, do you think it would be better to upgrade the CPU or to install an Nvidia graphics card? I've heard transcoding can be problematic on graphics cards, even if they are supported?
And apologies for going slightly off-topic but as you mentioned 4K content, I've only got a few media files that are 4K but this is something I'd like to start getting more of. The main TV in my house can direct play it but other devices probably can't. Would you recommend created "optimised versions" of these from within the Plex server GUI or have something like Handbrake create 1080p versions?