Are you planning on restoring or doing a clean install?
If you're upgrading to the i Phone 7, you're probably chomping at the bit to try out all the neat new stuff it can do.
Plenty of i OS launches have been marred by bugs and problems, so with that in mind, it's a good idea to have an up-to-date backup, because making a fuss isn't going to bring back your lost photos or documents.
Log in with your i Cloud account when setting up as new, and here's what you retain: Once you upgrade to i OS 11, you'll have the option to sync your Health data to i Cloud.
If you enable this feature and allow it to sync, you'll be able to do a "clean" install of future versions of i OS without losing your workouts, activity, and other information — AKA not losing the bulk of your Apple Watch's synced data.
While i OS 11 doesn't need as much free space to install as some of the earlier releases of i OS, getting rid of apps that you no longer use -- or perhaps have never used -- makes good sense.
Following the upgrade, you'll need to enter your i Cloud password in order to be able to reconnect to all your data and photos.