One option is Apple offers a recycling program (in the U.S.) wherein you may "sell" your iPhone 7 and receive a gift card. Details are here:
Then yes, you would purchase an iPhone 7+ at full price.
If you purchased your iPhone 7 new at an Apple Store (in the U.S.) within the past 14 days, you may exchange it at full value toward the price of the iPhone 7+.