Before it updates your iOS, iTunes does a backup. Here's what gets backed up (see "iTunes will back up the following information):
Photos are not included. So yes, make sure your photos are saved before updating.
That's exactly right. And since you have a MacBook Air (as I do), that means the synching should occur just fine (if you've set it up right in iTunes). In other words, once you actually do the update, the iTunes on your MacBook Air will re-sync your photos back to your iPhone.
Basically, the process is that your iPhone gets backed up, wiped clean, then the new iOS version gets installed, then the backup gets restored. That will restore everything in the article above, which does not include your photos. But the sync process that happens after the iOS installation would restore your photos from iPhoto given you've set it up that way in iTunes.
When you have your iPhone plugged into iTunes, while looking at the iPhone's summary page, click "Photos" on the right side of iTunes to see how you have your sync set up.
Regardless, it sounds like you'll be fine! Your photos will wind up in iPhoto once you place them there. They will be safe there.