would an upgraded graphics card provide any improvement or is it mainly a processor issue for playing crysis??

I played Crysis with a Pentium D 925, and had no problems, it played great.
My graphics card is 8600GTS
 
My guess would be the graphics card, but not 100% sure
 
According to your specs

I would likely say the CPU and the GPU. Which one is the bigger, right now likely the CPU, but there isn't much data on Crysis to make an accurate enough estimate so, but either way upgrading either would provide an improvement. If you upgrade your Videocard don't go any lower than an ATI HD38x0 or Nvidia 8800/9800, because anything lower is pointless with your current GPU. For instance going from your 7900gs to level101's 8600GTS would provide an unnoticeable if not non-existent frame increase. Although you would get DX10 rendering capabilities... whoopee...

GPU

So, far what ive seen its more a GPU thingy. You need a decent CPU, but nothing too fancy.