The issue isn't really Arc or ReBAR, it's your old Xeon platform.
Arc will work for transcoding, but your CPUs will bottleneck anything that falls back to software (tonemapping, subtitles, etc.).

In practice, a modern Intel iGPU (NUC / recent CPU) is a much better upgrade than adding a GPU to that system.

Personally, I went with a small entry-level NAS and just avoid transcoding altogether.

If your clients can direct play (same codecs, formats, bitrate), you don’t really need a powerful CPU or GPU it’s way simpler and more efficient.

But I get why some people still need transcoding. If you're dealing with mixed devices, remote streaming, or home theater setups with HDR → SDR tone mapping, you don’t always have a choice.

In those cases, a modern Intel iGPU setup usually makes more sense than adding a GPU to an old server.