You can do as you choose. What I am suggesting is the Apple recommended way of doing this and it has never failed me. If you want to transfer WiFi passwords and health app data, you must encrypt the backup first in iTunes in order to save and restore that data.
I have read here that certain game data can be iffy transferring from device to device. I don't know why that is. That has never happened to me, but I am not much of a gamer at all. Some games store their data in their own cloud servers so that data would not be in the backup anyway.