Sim card

The following two support article should address your questions:

• Transfer data from your previous iOS or iPadOS device to your new iPhone or iPad - Apple Support
• Use Quick Start to transfer data to a new iPhone or iPad - Apple Support

FYI ... Basically, you will want to transfer the SIM card before starting the transfer process. Also "Quick Start" would require that the iPhone you are transferring from is running, at least, iOS 11.

All the times I've upgraded/replaced the iPhone, the carrier had put out newer versions of its SIM cards, so that needed an upgrade as well. Side note: your phone # is associated to a SIM, the current one, but can be associated to a newer, different SIM. That association is done by the carrier.

As for the transfer, the new iPhone needs to be activated first, done thru Apple's servers. That requires communication and can't be done via Wi-Fi cause it hasn't and can't be configured before activation. So a SIM (or eSIM) is needed.

"Quick Start" is convenient but also requires communication. The pair of iPhones will transfer your data between themselves, but not the apps you have rights to use. Those are downloaded from Apple in the process.