Yes, you need to make a backup (or three or four).
Be sure to run mysql_upgrade after starting the 5.7 binary. There are some changes to tables that must be made and this is the way to do it.
The upgrade docs offers several upgrade scenarios.
Also take time to read the MySQL 5.7 Release Notes! This is not only a list of new goodies but it warns you to the changes that could bite you. Ten minutes here can save you hours later.