MySQL not using resources?

Hi I have a decent setup: 16Gb RAM and a 4 cored CPU. I'm on a 64-bit Windows OS with MySQL Ver 14.14 Distrib 5.5.24 Win64 (x86). I am also using InnoDB.

The query I am using to test the setup is a procedure that makes numerous SET calculations from a record. So for each record in one table it makes about 25 SET and SELECT statements, and then inserts it into another table. And that is a cursor for the whole database.

My I/O performance is sitting at about 15% during this operation. CPU maxes out at about 36% usage and RAM remains at about 25% usage - same as when system is idle.

I have set my MYSQL my.ini file as follows:

    [client]
port        = 3306
socket      = /tmp/mysql.sock

[mysqld]
port        = 3306
socket      = /tmp/mysql.sock
skip-external-locking
key_buffer_size = 512M
max_allowed_packet = 32M
table_open_cache = 512
sort_buffer_size = 2M
read_buffer_size = 2M
read_rnd_buffer_size = 8M
myisam_sort_buffer_size = 128M
thread_cache_size = 16
query_cache_size= 32M
thread_concurrency = 0

log-bin=mysql-bin

log-error="errorquery.log"
general_log=1
general_log_file= "generalquery.log"

binlog_format=mixed

server-id   = 1

**innodb_buffer_pool_size = 12G**
innodb_log_buffer_size = 256M
innodb_flush_log_at_trx_commit = 2
innodb_read_io_threads = 64
innodb_write_io_threads = 64
innodb_buffer_pool_instances = 4

[mysqldump]
quick
max_allowed_packet = 16M

[mysql]
no-auto-rehash

[myisamchk]
key_buffer_size = 128M
sort_buffer_size = 128M
read_buffer = 2M
write_buffer = 2M

[mysqlhotcopy]
interactive-timeout

Is it a problem with the test, is there a better way to stress test or is it a problem with my setup?