Which is better for a bright living room?

The C5. Its evo panel is noticeably brighter, so reflections and daylight wash out the picture less. The C3 is fine in a dim or controlled room.

Is the C5 worth stepping up to over the C3?

Yes if you watch in daylight, game on a PC above 120Hz, or want the longest software support. If you mostly watch movies in a dark room, the C3 covers the essentials.

Neither has a clear edge in lifespan; both use OLED panels with similar burn-in risk. The C5 will get webOS updates longer because it is a newer model.

Which is better for gaming?

The C5, mainly for 144Hz PC play and newer processing. Both have four HDMI 2.1 ports, 120Hz, VRR and low input lag, so console gamers will be happy with either.

Do both support Dolby Vision and Dolby Atmos?

Yes. The C3 adds DTS:X decoding, which the C5 does not list.

Which is easier to wall-mount?

The C3 at 32.8 lbs without its stand. The C5 is about 12 lbs heavier, so plan for two people.

LG C5 Series 48" OLED evo TV vs LG C3 48" OLED TV

Both are 48-inch LG OLEDs with 4K 120Hz panels, four HDMI 2.1 ports, Dolby Vision and Dolby Atmos, so the picture fundamentals are close. The C5 is the newer set: a brighter evo panel, the Alpha 9 Gen8 processor, webOS 25 and a 144Hz VRR ceiling for PC gaming. The C3 is an older generation that still delivers OLED contrast and gaming features, and it weighs less. Buy the C5 unless the C3's lower cost matters more than brightness and the newer processor.

Choose the LG C5 if you want the brightest 48-inch OLED LG makes, the newest webOS and 144Hz PC gaming support.
Choose the LG C3 if you want core OLED picture and gaming features and are willing to trade some brightness and processing for a step down in generation.

Prices

LG C5 Series 48" OLED evo TV: $830.83 at Walmart (last seen Nov 12)