The variable speed motor has permanent magnets, which 2 speed pump motors do not. The magnet make the motor run cooler, thus longer life, and the magnets make the motor more efficient. A pump is 30% more efficient than the same horsepower motor. The variable speed is not hard to understand, if you keep the manual handy. The Variable speed motor has 8 speeds, which allows more customization, such as having a salt system, pool cleaner or solar. Salt or solar would not work on the low speed, 2 speed.
You would not need the timer with the variable speed.
i think if you download a manual, you will not be over whelmed with the variable.
in replacing the entire pump, the plumbing heights may need to be changed. If the pump(which yours is) is good quality, I would install the motor only.
The impeller will not cause the bubbles, unless it is plugged and you don't have much pool action. Leaks have to be on the suction side of the pump, always check orings on the drain, lid, and suction valves. Cracks in the pump lid may be hard to see, can cause air bubbles. I usually pour water slowly over the suction fittings, if I see small change in the air in the pot, then I am close.
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Sorry i meant to say orings on the winter plug fittings (not drain) ...