I didn’t update my iPhone 7 before I erased it and now it’s telling me that the phone can’t activate because it needs an update. How could I possibly update my iPhone 7?

Some troubleshooting is required:

• Start here→iPhone 7 Repair Program for "No Service" Issues - Apple Support
• Followed by this→If your iPhone or iPad shows No Service or Searching - Apple Support
• And this→If you see "Software update is required to connect to your iOS device" on your iPhone, iPad, or iPod touch - Apple Support

And finally, if none of the above resolve it (or do it first to save some steps):

Go to Settings/General/About and look at Modem Firmware. Is the entry blank? If it is you need to reinstall it by restoring the phone to factory settings, then restoring a backup. Back up the phone first, of course:

1. How to back up your iPhone, iPad, and iPod touch - Apple Support
2. Restore your iPhone, iPad, or iPod to factory settings - Apple Support - follow the instructions to restore using your computer, do not using Settings/General/Reset (which is not included in those instructions)
3. Restore your iPhone, iPad, or iPod touch from a backup - Apple Support

If the modem firmware DOES have a value you may have a hardware problem. The first step is what I just posted, but after that you need to contact Apple support using the Get Support link at the top of this page.