Welcome to the Community,
you are right, backup is always a good idea and snapshots are no backup replacements. With the free Hypervisor you are actually limited with image/VM based backup options. The only application I'm aware of which supportes the free Hypervisor edition is Trilead's VM-Explorer.
Anyway, for a 24x7 environment it might be a good idea to have an automated/scheduled backup in place. What you may consider - I'm no salesman and it's up to you - is to get a vSphere Essentials license and a backup application. Veeam for instance ooffers a special priced Essentials edition.
Regarding the upgrade, make sure your hardware is supported for ESXi 5.5 and also consider to upgrade the host's firmware.
André