What does this mean? Intel i5-3570K

It will use 1 thread per application (such as games) but when there are a lots of intensive applications running at the same time then it will just automatically spread the load of the threads. (If it has hyper threading it virtually has 8 threads)

Some confusion above.

Modern games use more than one core, and programs like HANDBRAKE which convert video can use at least EIGHT threads. Modern CPU's can be set to intelligently force a program to use ONLY one core and shut down other cores (core parking) but in reality I often see the same data "jump around" from core to core. If single-threaded, it can't run on multiple cores at the same time in this scenario, but a core can finish processing a discrete amount of data before the CPU starts the next batch on another core. This is why there's some confusion when people see a game using about 25% on all four cores and believe the game can use four cores. Chances are that same game on a similar 2-core CPU would see 50% usage per core with similar performance.

If a CPU like an i5 has four cores (no hyperthreading) this is written as:
4C/4T

If a CPU like an i7 has four cores (with hyperthreading) this is written as:
4C/8T

Hyper-threading:
This involves using the same CORE of a CPU to process two streams of data. The core can only process one stream of data at any time, however there are delays in getting new data which can be used to process data already buffered from a second thread of data. For an i7-3770K which is basically the same as an i5-3570K but with these hyperthreads, a program like HANDBRAKE can operate up to 30% faster by keeping the CPU processing data constantly.

Games are very complex and can't fully send data to all threads of a CPU to be processed, although some newer games perform as much as 15% faster on an i7. If you only game however, this money would be better used on a better graphics card likely unless you have a high budget and think it's worth your while to prevent a slight bottleneck in some future games.

It's currently about $100 more for an i7 than an i5 though deals can be found.

There's also the issue of OVERCLOCKING which ties into the value of the CPU. Many of the CPU's not only can't be overclocked but have different maximum frequencies despite the same architecture.

*If you're buying a CPU today, the best Intel CPU for you would come down to the budget. Something like the i5-4570 (not overclockable. Those have a "K" at the end) can save you $30 or so but perhaps another $40 on a less expensive motherboard not optimized for overclocking, and perhaps a few more dollars with a cheaper CPU cooler.

For those with $1000 to $1400 budgets for a gaming PC I usually recommend the i5-4670K (unless video editing or similar task) and for $1400+ I tend to recommend the i7-4770K.

Easy it would be easily enough for your needs.