Will resetting my iPhone 7 change to iOS 16 version?

Zachyy is correct. If you were hoping that resetting your iPhone 7, it would be updated past iOS 15.8.4, that is not possible. iPhone 7 is forever frozen at iOS 15, with possible security updates, but will never run anything higher than iOS 15. If you need a higher iOS version, then you'll need to retire your now very old, released in 2016 iPhone and buy a new or much newer, more modern iPhone.

Your question is unclear. But what I can tell you is that your iPhone 7 no longer receives the latest iOS updates and cannot go past iOS 15.8.4. iOS 16 is not an option.

If you want to run iOS 16, you need an iPhone 8, iPhone 8 Plus or iPhone X.

But, since you will be looking for a new phone, it would probably make sense to look for an iPhone that will run iOS 18.

My recommendation would be an iPhone 15 Pro or iPhone 16 Pro version or higher.

You cannot “restore” iOS 16 to an iPhone 7. The iPhone 7 never ran, or was compatible with, iOS 16 in the first place.