Well, my first observation is that $500-700 and semi-professional don't fit together. $500-700 will barely get you a semi-professional lens, let alone a camera body. For that price range, you are looking at entry level consumer gear, not even mid-range consumer gear.

Personally, with the lack of any kind of viewfinder (optical or EVF) I would recommend strongly against the NEX5. A viewfinder isn't just a way to see what you are shooting, but also a critical third point of contact for taking stable shots. Without being able to hold it up to your face, taking good shots, particularly at a distance, is going to be next to impossible without using a tripod which isn't going to work well for your stated objective of shooting festivals.

You would be far better off getting an entry level DSLR such as a Canon Rebel. The entry level models still won't be particularly strong at things like low light, but they will allow you to invest in decent lenses over time so that eventually you can upgrade to an actual semi-professional body without having to buy lenses at the same time.

The ability to use a flash is also pretty critical to many shooting situations, particularly exterior shots with the sun behind the subject, since flash is necessary to fill in facial details and get a good look to the shot. Again though, in your price range, you wouldn't be able to afford a good flash since a good flash alone will also run you $300 to $500.

If you really wanted to be able to shoot with what would generally be considered semi-professional gear, you really need a budget more around $3000 to $4000 with $1500 to $2000 for a body, $800 - $1200 in glass and a few hundred for a reasonable flash unit. A full professional rig on the other hand runs in to the $6,000 to $10,000 range. Consumer DSLR covers pretty much anything from the $600 to $1500 range.