I just found out that cpu(i3 350m) on my dell inspiron n5010 can be removed, i.e. can be replaced. so i was wondering can i change my processor to some more powerful like i5(1st gen) or even i7 which has same socket as i3.
You can use a first-generation i5, yes - I don't think these shipped with i7s. The thing to do is NOT exceed the current power (TDP) rating (i.e., don't install a 35W CPU in place of a 25W unit).
You are limited to the first generation Core CPUs - the later generations will not work.