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It's the first digit (or 2 digits in the case of tenth gen) after i3 or i5 or whatever.
E.g. i5-8250U is 8th gen.
i5-5250U is 5th gen.That 8th gen is probably at least twice as fast as the 5th gen.
A modern i3 is often faster than an old i5.https://www.cpubenchmark.net/ is a good site for comparing them. The old rule of thumb was that each stream to be transcoded would take about 2,000 of the CPU score. With the hardware decoding that may not exactly be the case now but it gives an idea.
For the NUC I'd see if you can stretch slightly more and get an 8th Gen processor one or later. They're quite a bit more powerful for not much of an increase in cost.
My library has something like 8,000 tv shows and 1,000 movies and is perfectly fine. I occasionally run it on my file server when I'm testing stuff and it chugs a bit on there (and can't transcode).
I run my plex server on Ubuntu (and also use it for playback) as (I think) it's a little lower OS overhead and a bit more stable. Saying that I've done a fair bit of cursing whilst mapping network drives and getting shit to work whereas it's much easier to do all of that on Windows (although someone who uses linux a lot may disagree with me there)