IPhone 4s: Backup, Restore, and updating questions??

Question

So, over the course of the last couple weeks, my iPhone 4s has been lagging, freezing and some apps are crashing. I'm assuming I should do a restore on the phone. I've never done one before, so I'm a little nervous about it. So I have some questions before I get started.
1) If I restore my iPhone to factory settings and then restore my latest backup will the problems that I'm having still persist? I still have 6GB of empty space on my phone (I have the 32GB) so I don't think the lagging is caused by the phone being too full. I'm just wondering if I load from the backup will the issue that's causing the phone to lag/freeze/crash just be put back on the phone when I do the restore?
2) I haven't yet updated to iOS 8 because a few people I know did it with their phones and it essentially rendered their phones unusable. I was wondering if I HAVE to update to the new iOS when I do a restore? I've heard mixed reviews on the performance of iOS 8 on the 4s, and I don't want to make any problems worse.
3) If I do the reset to factory setting and then restore from my backup, will everything that's on my phone at the time of the backup be put right back on the phone? Will all of my photos, contacts, game data etc be transferred? Essentially, I just want to make sure that nothing at all is lost in the restore process.
Also, if anyone has any suggestions on how to make this as painless a process as possible I would appreciate any and all input.
Thank you in advance!

Answer 1

What can happen after doing an update is something doesn't go quite right - the phone will work fine, but you'll notice odd stuff, like it being slower than usual, locking up, etc. A restore usually resolves that.
If the phone seems to lock up in general (ie: not just in a certain app), then doing a restore is worth doing. If a particular app tends to lock up, the issue is likely with that app.
Wiping the phone and restoring re-installs the iOS from scratch, which will get rid of any issues that may have during an update.
You do have to install iOS 8 at this point - Apple will, for a very short time, continue to sign older versions of iOS after a new one is released, but that usually only lasts a few days, if that.
From what I've read, the 4S runs iOS 8 just fine. Initially, you may notice it running more slowly, but you shouldn't notice that after using it for a while.
As for what gets transferred back - I know from an iTunes backup, you get everything - essentially a mirror image of what your phone looks like when you do the backup. Not sure if the same is true for an iCloud backup.
Hope that helps
~Lyssa