High-Level Description:

The upgrade procedure from 5.6 to 5.7 should be :
1. stop the 5.6 server.
2. upgrade the binaries
3. run the 5.7 server over the 5.6 server's database with *no* special
options
4. run 5.7's version of mysql_upgrade
5. restart the server.

Nothing more, nothing less.