The i5 will still last an year-ish, probably less. Definitely need a GPU upgrade, something like the GTX 1070 or GTX 1060 6GB, depending on budget.
Need more RAM, at least 8 gigs, though at this point buying DDR3 RAM will not be a good choice since you'll have to upgrade to DDR4 pretty soon anyway.
If you don't mind upgrading right now, it's best you make the jump. Your PC, especially the GPU and RAM, will struggle in modern games. Also, get Windows 10 already, it's not that bad. Yeah, you can't disable updates, but honestly if you think your data is safe on Windows 7, you're quite mistaken. Anyway, for DX12 games you're gonna need Win10, they won't run in Win7.
As for playing at 1080p high settings, that's a no. Your CPU might just pull it off, but your GPU and RAM won't. You'll need a GTX 1060 6 GB, and at least 8 GB RAM, but 16 GB is recommended. But like I said, if you've got the funds, it's best your upgrade now to Ryzen 5, though you'll still have to wait for some time for the GPU market to settle.