this can only be done with a full install. period. doesn't matter how you try, it has to be a clean install.
32-bit OS upgrade is not an option to 64-bit OS.
with you current RAM and 32-bit OS you might want to pull out RAM and then perform re-install
and see if you can at least get back to the 3GB RAM from the 2.75GB you're at now
but that's no guarantee.