You should probably go for a 7950. Because when comparing the 7950 and 7970 from the same manufacturer the only difference seems to be the clock speeds (someone correct me if I am wrong) so it would be best to buy a good 7950 from perhaps asus or msi with a good cooler so you can overclock it if neccesary. or you can keep the one you have and if neccesary get an aftermarket cooler
That psu will be overkill for a single card set up. Now, if you planned to crossfire, then it would be a different story. Unless there is a problem with your current psu, I would advise you to just keep it. As for the 7950 vs 7970 thing, they are different gpus altogether. Meaning that a 7950 at the same clock speed as a 7970 will not have the same performance. That said, I think that the performance difference is so minimal that it wouldn't really be worth the extra money (but if you have the money, then sure, get a 7970). Just make sure to get a card that is not voltage locked so that you can overclock it. The beauty of the 7950 is how well it overclocks. Last I heard, the MSI Twin Frozr 7950 is unlocked, but check on that before purchasing as I am not 100% about that.
An 8350 and a 7950 should max out pretty much all games at 1080p.
my budget could be anywhere between $400 to $600 depending on my patience and whether or not i'll have to lower the sellng price on my old computer, which i'm selling to get my new computer parts.