An i5 is more than adequate to run SH4. I had a first gen i3 with onboard Intel graphics, and it did fine. The game itself runs fine where ever you install it, but if you're going to apply mods, then you have to be outside of the Windows' "Program Files" folders, which Windows protects from "un-autorized" alteration, such as what applying mods does. A Steam install can complicate things, but doing what Steam Support suggests in
Moving a Steam Installation and Games are the best ways to move the game install. It also helps if you have a 64-bit OS and use the Large Address Aware (LAA) utility app to set the SH4.exe file to enable access to more RAM. CapnScurvy has a thorough write-up concerning its use in
Windows10; Large Address Aware; SH4 Install, which also applies with other versions of Windows with slight alterations. If you do have any further issues, give a shout.