Yes it will FOR SURE be bottlenecking.
I am running a core 2 dup at 3.4ghz.
I set my graphics to 800x600. My fps still dropped to around 35-40 at times when playing online. I ran gpu z in the background and it showed that GPU was only at 40% load. The only conclusion I could come to was that my CPU is limiting it.
I don't know what you should upgrade to since I am not sure how great quads perform on Cryengine