If my CPU was bottle necking the GPU, then the CPU should be at high usage correct? When I'm playing games the CPU usage stays under 50%, it's usually at 40% actually.
Also, yes this i5 has hyperthreading.
I have Windows 8 64-bit, 10GB DDR3 1333MHz RAM
It's saying 50% because the game is only utilizing 1 core, with your CPU being dual core, you can see where the 50% is coming from.. so yes, you are CPU bottlenecked, you will need a CPU where single core performance is higher than that of your current CPU.
Games are slacking at the moment in terms of multi-core utilization though, so there's only so much you can achieve here.