@ddepaolis You can upgrade directly to the latest version if it is offered.
You can set the update branch to Previous Stable: https://docs.netgate.com/pfsense/en/latest/install/upgrade-guide.html
Per the upgrade guide it is recommended to uninstall packages, upgrade, and then reinstall packages. Otherwise the upgrade will also try to upgrade packages during the upgrade. Either way they do get upgraded to the latest version. Package settings are saved by default, though a few like pfBlockerNG have a checkbox to remove package settings when uninstalling.