AOLserver and Postgres is not necessary, but recommended for performance reasons. Furthermore, dumping the database and installing it on 7.4.6 gives you the safe feeling that your old site will still work, even if the upgrade fails.
Please make a fresh checkout of *all* of oacs-5-1 (not only packages) and modify the resulting /www/*.adp to your needs. This is necessary due to changes in blank-master.adp and I think standard-master.adp as well.
Using the APM is the foolproof way. From what I heard, /acs-admin/install does not execute the upgrade APM callback procs correctly (sometimes). But maybe I'm only an old hacker that is attached to the /acs-admin/apm interface :).
Bug Tracker will not give you any trouble, neither should .LRN in my experience and definitely not OpenACS itself. Be warned though to make a check on the ACS Authentication issue which is desribed in the forums quite at length.
Anything else that might go wrong will be seen on the development server where you test the upgrade.