firstly E5 is not socket compatible with E3, so you'll need a different motherboard.
Main differences between E3-1270V2 and E5-1650V2 are the 2 extra cores, so 50% more performance on the E5, the additional 4MB of cache they bring with them. Also E5 socket supports more memory channels and PCIe lanes.. The memory channels will help you with intense quality modes during encode.
Another option may be to upgrade the E3 to an E3-1275V2 which has the GPU and thus Intel Quick Sync Video which offloads the video encode. On that generation you can get about 8x realtime encode at fast modes..
But if you are prepared to change mobo - then an E3-1285V3 is the one to go for.. Cores are Haswell based with AVX 2.0 to help on Core tasks, and the video quality on that generation Quick Sync is far superior.