Is iPhone 5 the most significant iPhone release?

It was the first iPhone to increase screen size, move headphone jack to the bottom (were it is more preferred), introduced the modern earpods and much slimmer lightning cable, LTE, and is the lightest iPhone yet.

Other devices seem to only introduce a faster processor and sleeker design.

Yes, I agree. Apple did a huge redesign more the iPhone 5. Also, iOS 7 seems like the biggest iOS release

If you look at it that way, it could be considered so.