Interesting Global News
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We have a Nvidia Shield so transcoding isn't needed for us either. Our server is on an old NUC with a fifth generation i3. Started overheating a year ago so I removed it from its case. It's running Windows though so now that the little one is back in school I might upgrade it to Mint and see if I can prolong its life.
Regarding YouTube, we have Smartube on the Shield, and have it configured to open to the playlists page, with our son having his own profile. This lets us set up playlists for him to watch that don't include any attention whoring videos and are (at least in part) vetted by us beforehand. Lately I've been considering adding the YouTube content to our server. Smartube is pretty tweakable though, I like it.
With no server-side transcoding, yeah the nuc is plenty, but I also run my media server (JF containers, to be specific) on Debian.
If you do end up needing transcoding, the newer Intel stuff is great. I'm considering arc actually for other reasons, but ideally anything skylake (for HEVC) or Kaby Lake (hevc 10 bit) on up is a rock solid choice, no external GPU needed.
I appreciate the advice, I'll keep that in mind should I want server transcoding in the future.