upgrade gets activated with a valid Windows 7 activation. Typically if you buy an OEM Windows 7 PC windows 7 is activated in the factory by the OEM. The retail version of Windows 7 will have the key in the package and is entered. Windows 10 upgrade uses a digital entitlement once it verifies the upgraded OS is valid. Digital Entitlement is where your pc information is stored on MS servers. Windows 7 doesn't use digital entitlement.
Can I activate Windows 7 online using the Windows 10 activation key?