Virtualize or not? And if yes, how?

[IVB]

I've been getting taught by JKMonroe about virtualization over text, but I'll switch to forums as I A)have too many questions for text, and B)others may benefit.

My problem:
1) Too many apps are fighting with each other for CPU, machines get unresponsive, CQC gets flaky. I don't want to add more machines.
2) I think boot disk on mega-array server is dying, got one BSOD and random errors requiring reboot increasing.
3) RocketRAID card LONG past warranty date

The hardware I have:
Server 1:
Specs: i7-4770/32GB (soon, first i7 was DOA, as of this minute its an i3). LGA1150 mobo, 2.5 years old.

Server 2:
Specs: i5-3570/16GB (quad-core but no hyperthreading, 4 threads). LGA1155 mobo, 4 years old
RocketRAID card with 5x4TB RAID5. card is 7 years old, drives all replaced 2.8 years ago.

Major Apps
Ones that can run on any machine
CQC: low ram, low cpu
PlayOn: high cpu, low ram. Not used often but when it is, it takes 50% of a hyperthreaded i3 dual core
SQL*Server
BlueIris: typically 50-70% of an i3

Ones that I want on an easy-to-access machine
Adobe Photoshop & Lightroom: low cpu but 5-7GB of RAM
Plex: high cpu, medium ram. Transcoding one BluRay takes 98% of the i5-3550. Moving to all BluRay, I need to be able to stream at least 2 at once.

Future architecture (guessing)
First floor server: Use the i7/32GB, Win8, directly run Adobe & Plex
Basement (accessible via crawlspace): VM Server (maybe). Get at least a quadcore hyper threaded as
- PlayOn & BlueIris each use 50-70% of the i3/hyper so give them 3 cores
- CQC & SQL*Server could get 2 cores

Steps (I think hence this post)
1) Put in the i7 whenever newegg ships me one that works
2) Does a VM server running PlayOn/BI/CQC/SS need more than 16GB? Looks like no more 32GB sets supported by that mobo are sold. If so, then get the i7-3770K. Thats $450 though. If it won't work, i'll look into dual xeon machines so I have headroom. Thats over $1K in parts it seems.
3) Get a Synology with 3x6TB & copy all the data off the array.
4) Migrate Plex from basement i5 to main floor i7 (once installed).

Questions
1) See above about 16GB for a VM Server. Do I put $450 into a 4 year old mobo, or is it worth it to spend twice as much on a new box? (No desire to buy new unless I absolutely have to. If I get a new one, I might as well get a dual xeon so there's headroom, but man that sounds like a lot of work)
2) On a VM Server, JKMonroe said I should install VMWare on the boot disk. But normally mobo's come with windows driver disks for LAN, graphics, etc. Is this not done at this stage using VMWare?
3) How do I load up a VM with windows on it? When/where do I create that VM?


I have time to putz now but final pitch to new client on Wednesday, may only have 2 weeks left on sabbatical. I'd like to get this and many other house projects done before then.