iOS 15 will work with iPhone 7 as long as the phone's battery lasts, whether iOS 16 will work on the iPhone 7 or not I have no idea and neither does anyone else outside of Cupertino or if they do they are under very strict non-disclosure agreements.
Apple sells a new iPhone 11 with 256 GB of memory for $749, A comparable iPhone 12 costs $200 more ($949). The $200 buys a 13% faster CPU, 5G connectivity, and probably an extra year or two of compatibility with the latest version of iOS. Apple will probably give you the same $60 or so as trade-in for your iPhone 7 on either model. You do the decision tree for yourself.
(NOTE: that is an iPhone 11 and an iPhone 12. Neither is the top of the line Pro model with the three lens camera and associated bells and whistles or the larger Max model I prefer for its larger screen that better fits my big hands and elder eyes. If you want the top end three lens camera (good enough to challenge a a decent digital SLR) or the larger form factor, the only new option is the 12 and you are looking at another $200 to $300) I justify the Pro on the basis that if I didn't have it I would spend even a lot more money on a genuine digital SLR that I would never have with me when I wanted/needed it. My wife humors me. 🤦ðŸ»â€â™€ï¸
