Can I create a partition and store files I want to keep there, then do a fresh install to upgrade to Big Sur, or will the fresh install delete all partitions?
Installs can be side by side, but your files and folders and user data don’t merge if you have two or more systems. Some people store their user folders on one “volume” or “partition” and then have several systems share that account.
It all really depends what your goals are for the data and the apps and the OS versions. You have a ton of flexibility now with APFS and shared space storage management.
One new “trick” that’s very easy is install the new OS on a new volume and then migrate the data from the old “volume” - you do end up with two copies but if the new system breaks, you can delete it and go back to the old easily.