According to this comparison the CPU’s does compete on a kind of similar level, despite the Ghz property. Look at both the single- and the multi threaded results. Overclocking is bad for the CPU’s health, and i7 is already a “weaker” construction compared to the Xeon durability under long heavy loads. Xeons also run in dual mode where two cpu’s can work together (software pry supports this) on one board, which is a great extensibility option.
While you are absolutely right about the Xeon’s RAM properties. the newer i7 is also worth to consider with the 128gb ram limit (which already is quite an investment to purchase all this stuff). But, of course this chart will clearly explains the softwares demands under numerous circumstances, where the RAM requirement can make your decision very simple.
Air cooling can be sufficient (chasing have to have a good air flow property), but you have to set the room’s temperature and humidity to low (with an air conditioner perhaps) where your workstation will operate.
After 3 or 4 years you will likely to look for a newer system (to double the performance), so you should consider your current investment as such.