A 7970 is a nice jump in graphics power over a 6950.
But a 6950 is already a very good card.
AMD does not make very good gaming cpu chips compared to Intel.
The instruction efficiency per AMD core is much worse than Intel, and most games do not use more than 2-3 fast cores.
I have no experience with arma 2, but I suspect that your $400 upgrade budget would be better spent on a $220 3570K and a $100 Z77 based motherboard.
To help clarify your options, run these two tests:
a) Run your gamee, but lower your resolution and eye candy.
If your FPS increases, it indicates that your cpu is strong enough to drive a better graphics configuration.
If your FPS stays the same, you are likely cpu limited.
b) Limit your cpu, either by reducing the OC, or, in windows power management, limit the maximum cpu% to something like 50%.
This will simulate what a lack of cpu power will do.
Go to control panel/power options/change plan settings/change advanced power settings/processor power management/maximum processor state/
set to 50% and see how you do.
If your FPS drops significantly, it is an indicator that your cpu is the limiting factor, and a cpu upgrade is in order.
It is possible that both tests are positive, indicating that you have a well balanced system, and both cpu and gpu need to be upgraded to get better gaming FPS.