Noticed on another thread you mentioned you have a 9th gen i5.
The internal GPU in the i5 will handle your transcode requirements. It can decode HEVC video.
If you do not need the R9 290 for other purposes, pull it from the system. Plex will then use the i5’s internal GPU.
If you want to keep the R9 290 in the system, see this site. It details how to use the Intel internal GPU for Plex with the R9 290 still installed.
https://erik.ellsinger.me/how-to-use-integrated-graphics-for-plex-transcoding/
To specifically answer your questions:
To transcode 4K HDR movies, you’ll want a 7th gen Intel GPU or later. Earlier versions do not support HEVC video.
If you do not care about HEVC video, you can go with a 2nd gen - 6th gen CPU. However, the quality of video generated by those earlier generations is not the best, especially 2nd & 3rd gen.
Plex would fall back from the Nvidia GPU to the CPU, not to the internal Intel graphics.
