Yes, the R820 isnt supportet for ESX 7.0. buts thats only on paper. Our R820 runs fine with 7.0.3 for a long time.... but we are fully away about the support.
If your PowerEdge have a iDRAC Enterprise you should use the virtual cdrom and apply the Dell Custom ISO. If you want to boot from CDrom be sure that you create a bootable one... same for USB. Within iDRAC you can specify a "one time boot from....<device>" otherwise press F12? for boot manager.
If you try to upgrade a existing ESXi installation you might be face the problem of a to small boot device (no... a 2GB SD card is not enough). Also some old modules need to remove prior. But i never have upgraded from 5.5 directly to 7.0.x.
Regards,
Joerg