Restore phone and updates?

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Android Central Question

I really like my Note 5, but it's been a little funky lately. Battery life not great, sometimes "GPS not found" while traveling with Google maps, and bluetooth connection to my Plantronics headset sometimes stops working.
I decided that before I drop a lot of money on a new phone, I would try a factory restore/reset. I believe the phone came with 5.1 but right after it first started it says it's on 7.0? So it's not a real factory reset? Since these devices seem to loose something over time, I wanted to put it back to the way it was when I first got it. Is this normal?