The owner's statement is somewhat valid, as newer 7200 HDs made in the past couple of years do run cooler than their predecessors from the 90s/early 2000s. There are a couple of threads on other forums where people claimed to have installed 7200 RPM drives in their CRT iMacs, and have had no issues with overheating thus far.
http://discussions.apple.com/message.jspa?messageID=523863
http://forums.macrumors.com/showthread.php?t=78132
http://discussions.info.apple.com/thread.jspa?threadID=1903359&tstart=105
http://forums.appleinsider.com/showthread.php?t=57824
Regardless, I would just play it safe, and stick with the 5400. The components in these iMacs are already fragile enough.