Should I upgrade to MacOS Sonoma?
Yes but you will probably need to upgrade your applications
Should I get MS Office 365?
Yes or MS Office 2021. Depending on what applications you need.
Do I need an Anti-Virus software?
Yes - I recommend Avira (Its free and does the job)
I also recommend Malwarebytes Browser Guard for your web Browser
https://www.malwarebytes.com/browserguard
Backup Solutions
TimeMachine is great for a local backup.
iCloud Drive- now backups local files to the cloud, a good alternative to Carbonite. (iCloud does not backup applications and the Mac OS)
Carbonite is great for off site storage, but I would still also use TimeMachine.
Carbonite Basic Version 56.99 a year https://www.carbonite.com/