Does upgrading OS disable older software?

If you are/were using an older, 32-bit version of MS Office for Mac (2011 or 2016) then, yes, upgrading to Catalina will disable MS Office - the apps, not the data files. Those older apps are not compatible with Catalina or later versions of macOS. But your Word, Excel & PPT files will be just fine - they are not affected.

If you want to continue using MS Office you will need to upgrade to Office 365 or Office Home & Student 2021 (both are 64-bit apps). I suggest that is a better path than trying to convert "thousands" of Word & Excel files to Pages & Numbers.

Depends what you are upgrading and from what to what. If you are upgrading your operating system to Catalina or newer it will only run 64 bit apps. If you currently have a 32 bit version of Microsoft Office it will no longer run. This does not impact your documents and Excel spreadsheets. It only affects the Office app. Your existing documents and spreadsheets will continue to work with a newer 64 bit version of Office.

In answer to your last question, Pages and numbers normally has the ability to open Word and Excel files. You will be given the option to convert them on a file by file basis, so you do not have to do any wholesale conversions.

You could also use LibreOffice

https://www.libreoffice.org