iTunes Match requires iPhone OS upgrade that requires transfer of purchases that won't work
I recently subscribed to iTunes Match. Apparently I need to upgrade my 5S iphone from iOS7.0.6 to 8.4 in order to use Match. When I try to do that, iTunes informs me that I must first transfer purchases from the iPhone to my computer or I will lose them. When I try to do this only some of my iTunes purchases transfer so I don't continue the upgrade. How can I proceed with the upgrade so I can use Match without losing music I've already purchased on iTunes over the years? Once I upgrade the iOS, will I also have to upgrade my iTunes? I have iTunes version 11.2.2.3
iPhone 5s, iOS 7.0.6