Try looking for and deleting the installer file that may have been downloaded:
- Open the Settings app on your iDevice and go to “General”.
- Select “Storage & iCloud Usage”.
- Go to “Manage Storage”.
- Locate the nagging iOS software update and tap on it.
- Tap “Delete Update” and confirm that you want to delete the update.
Once you've done that, restart your phone and try again. I think it's possible that, a long time ago, you downloaded the installer for iOS 10.2.1 and now, when you try to update, it's trying to use that, which won't work.
Best of luck.