How to update my iPhone 7's iOS?

In general you could go this route: Settings > general > Softwareupdate. A new version will be listed there.

But keep in mind, the highest supported versiob for the iPhone 7 is iOS 15.7. 3.

If you are already using that, you can't update any further. So iOS16 is not installable on an iPhone 7.

Here is a list of capable iOS16-devices: iOS 16 - Apple

iPhone 7 Plus, iOS 14

You can update to iOS 15.7.5, you can check by reading this Apple article:

iPhone models compatible with iOS 12 -> iOS 16.

iPhone models compatible with iOS 15.5 – Apple Support (UK)

You need about 6 GB device storage and good Service and/or Wi-Fi.

If they are On, turn Off Hotspot & VPN.

Charge the battery > 70%.

Go to Settings -> General -> Software Update -> Download and Install.

See the following Apple articles:

Update your iPhone, iPad, or iPod touch

Update your iPhone, iPad, or iPod touch - Apple Support (IN)

If your iPhone, iPad or iPod touch won’t update

If your iPhone, iPad, or iPod touch won't update - Apple Support

You can do the update via PC, see this Apple article: Update software on iPhone, iPad or iPod touch in iTunes on PC

Update software on iPhone, iPad or iPod touch in iTunes on PC – Apple Support (UK)

If you have a Mac see this Apple article: Update your iPhone, iPad, or iPod touch with the Finder

Update your iPhone, iPad, or iPod touch with the Finder - Apple Support