How to switch from iPhone 4 to iPhone 5S - advice needed!

Hi there.
Sorry if my questions sound stupid. I've had my iPhone 4 for almost 5 years and I've never had to change smartphones! My iPhone 4 currently has iOS 6.1.3. iCloud is NOT turned on for anything.
I am getting a new-to-me iPhone 5S and I will be passing down my iPhone 4 to my son. I want to make sure that I don't mess up anything in the transition. My questions aren't in any particular order, but I numbered them in case some of you might only be able to speak to one or two points instead of all of them. Thanks in advance, I need a lot of help!
1) How do I ensure that my data (such as apps data, contacts, etc.) get transferred to my 5S? Should I turn on iCloud for this or will backing up my phone to ITunes and then restoring it but to the iPhone 5S take care of it? (I realize that people like the convenience of being able to access things in the Cloud but I personally don't like the idea of having my stuff floating out there so it's not an option I'd like to enable if I can avoid it - all my contacts are stored in the phone's Contact App on the phone, NOT synced from my Google contacts, for instance, and I'd like to keep it that way).
2) Will I lose all my messaging history? Should I download all the pictures that were texted to me that I want to keep or will all of this be transferred to my new phone (I have AT&T). I do use DiskAid to get photos and videos from my phone's camera roll to my laptop so if I were to have to save the texted photos to my camera roll, I do know how to preserve them afterwards.
3) I do want to keep the same Apple ID. At what point do I need (if I even need to) unauthorize the iPhone 4 from my iTunes account so I can use my Apple ID on the new phone with the same iTunes account? And how would I do that? Would unauthorizing the phone from iTunes then allow my son to register it under his own Apple ID?
4) So speaking of iTunes, I have an older version of iTunes on my PC (I think I last updated it 2 years ago). I rarely use it but it works fine for me and I've heard bad stories about the newest version so I've never had a reason to update it. Do I need to upgrade to the latest iTunes prior to backing up my iPhone 4 and restoring it to the 5S (is this even how I would do this?!)
5) When I get the 5S (that was used by someone else before), what can I do to make sure it was wiped and disconnected from the previous owner's account? I don't want that person to somehow be able to get my data in their Cloud or remotely access "my" phone!
I'm not even sure if I'm asking all the right questions. Any help with this transfer is very much appreciated!

Thanks so much tonefox, this is very very helpful. It also had a link to an article about what to do to erase my iPhone 4 to pass it on to my son so that was also very helpful

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