You could do it within iTunes. In iTunes, you can set the import parameters to MP3, AAC, or a number of other formats. After you have set the import parameters to the desired type, if you do a CTRL+Click on a file in your existing library, you will see an option in the context menu for creating a copy of the music file in the new format you selected.
The copy of the new file will contain all of the metadata. So, you could simply import the newly made (smaller) music files to your new iPhone. Don't forget to set the parameters back to what you originally had before you try to import/add new files to your original library.