With limited expertise, I would advise "smart" upgrade in place. Clone your SMS VM, put it on a different network to avoid IP conflict with the production environment and perform upgrade in place. Play with the newly upgraded VM a bit, open SmartConsole, make sure you understand what you see, and then just swap "old" and "new" VMs.
Mind, in this case, logs did not exist yet, will no magically appear on the new machine and will be lost. If you absolutely need them, perform a second upgrade in place after lab tests on your R77.x SMS. In this case, you will have some pause in security administration.
For the GWs, it is all a function of complexity and time at hands. Upgrade in place or re-install (I recommend doing it with Blink, look it up), outcome and amount of efforts to invest are comparable.