I agree with GBN and Marian.
To answer your question regarding 2-CPUs handling 25 requests:
I have a 2-CPU system which supports about 750 user connections and a running average of 4K Batch Requests a second. Several items are important for me: Design, Management, and Tuning. If you start with a poor design of your application and database then you will fail at load (think scaling).
High CPU may indicate memory pressure. You mention there is only 7GB of memory available to SQL Server. If you have poorly performing indexes (Too many indexes, incorrect indexes, or no indexes) then this will cause the system to page more of the database into memory for various requests then if there are appropriate indexes. I would caution going hog-wild creating indexes as the wrong ones will also hurt you as each has the potential to require an update in the course of a row update (Create-Update-Delete) operation.
Also, using the Missing Index DMVs requires using what you know of your application and database and not just implementing each recommended index. I would checkout Kimberly Tripp's blog entries regarding indexes here. After the Index section, looking at the other categories might be helpful to you situation.
If your Java/Hibernate update of 5 tables in a single transaction is doing the updates via multiple round-trips to the database, then you are leaving yourself open to contention (Blocked CRUD requests). The issue worsens if the application is not able to return to the database in a timely manner. While in the application, the associated active transaction could block other requests from processing and cause request time-outs.
Add the two above issue together and you start to have a nasty case of performance headaches.
Reducing the number of database round-trips within the context of a single transaction would be a very good thing to pursue. Perhaps a stored procedure would help.
The rest will require work in order to get your application to scale. You might also consider memory, but that should come after a design and performance review is done and the needed changes implemented as adding memory right away will mask your issues.
Absolutely follow the suggestions Marian has outlined.
I would say you have found yourself a wonderful challenge and wish you a great success!