“Should Office 2016 be uninstalled before installing Microsoft 365? Will my current Word, Excel etc. files be affected?”
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No, switching plans doesn't impact your Office apps and you don't need to reinstall them. For a full outline of information regarding the upgrade to your subscription and commonly asked questions, visit here: https://support.microsoft.com/en-us/office/switch-to-microsoft-365-family-or-microsoft-365-personal-3fcc1efc-2722-427f-8efa-db94b9b0a36b?wt.mc_id=o365_cons_ts_link&ui=en-us&rs=en-us&ad=us
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