First I would try installing Win10 just to see how it runs, whether the hardware is compatible, etc. IME, apart from driver issues, any machine that will run Win7 will run fine on Win10. Win10 is a better, more secure OS. Win7 is pretty much at the end of its life so I wouldn’t spend money upgrading a machine that won’t run Win10.
If you are already running Win7, then you should be able to install Win10 without paying for an upgrade licence. You can download the Win10 installation files from Microsoft and create a bootable USB stick or DVD. If Win10 runs ok, then I’d look at installing an SSD and bumping the RAM up to 8BG.