iPhone 7 is heating up while charging & using

I am not aware of the ambient temperature in which you are using the iPhone. However --> Keeping iPhone, iPad, and iPod touch within acceptable ...

Store the device where the temperature is between -20º and 45º C (-4º to 113º F). Don’t leave the device in your car, because temperatures in parked cars can exceed this range.

Use iOS devices where the ambient temperature is between 0º and 35º C (32º to 95º F). Low- or high-temperature conditions might cause the device to change its behavior to regulate its temperature. Using an iOS device in very cold conditions outside of its operating range might temporarily shorten battery life and could cause the device to turn off. Battery life will return to normal when you bring the device back to higher ambient temperatures. Using an iOS device in very hot conditions can permanently shorten battery life.

It depends on the usage. How has your usage changed after iOS update.

Protect & Prolong life of your iPhone's Battery: About the battery usage on your iPhone, iPad, and iPod touch ...

Try some of these options too.

1. Avoid Screen Mirroring
2. Put on Low Power Mode
3. Put Auto Lock On (1 min):- with low power mode it will be 30 Sec
4. Put Auto Answer Off
5. Disable Push notifications for apps you do not use often
6. Enable Auto Brightness:- Settings > General > Accessibility > Display Accommodations > Auto-Brightness [Enable]
7. Manually lower brightness from Control Center
8. If you Want to watch continuous Video. Stream it on TV or a Monitor
9. Don't force close apps; Apps which are not on frontend screen are paused by the system to save energy. Apps require more energy to re-launch. Apps which are open in the background use large memory is a myth and quitting them is counterproductive
10. Location services to be allowed only while using the app
11. Set your iPhone to fetch email and calendar data from internet less frequently
12. Turning off Background App Refresh 
13. Charge before it drops below 20-30%
14. Try connecting to trusted Wifi where ever available in stead of Cellular
15. Enable Airplane mode in areas with bad cellular and wifi coverage. Your phone keeps trying for reconnection with the missing / weak network. This uses lot of energy
16. Switch off Wifi & Bluetooth while in Roaming or Not in Range
17. Enable "Wifi Assist" : Settings > Cellular or Settings > Mobile Data > Wi-Fi Assist [Enable]
18. Periodically Check your Battery Health (Settings > Battery > Battery Health)

iPhone Battery and Performance