I was thinking of just backing everything up then re-uploading them after the upgrade, but it seems to me like i might have to add new mods with the 3.8 version & edit the templates again
Templates you have edited will stay edited after the upgrade. However, you will have to apply the mandatory changes to them, otherwise you will lose functionality.
Ok you have templates you've modified from modifications or whatever. Those will not change during the upgrade.
vBulletin 3.8 has template changes. If you have modified lets say "SHOWTHREAD" for 3.7.4 and vBulletin 3.8 made changes to "SHOWTHREAD" you will have to make those changes yourself.
On the flip side, if you didn't modify the template, and it has changes for vBulletin 3.8 it will automatically be upgraded.
The vBulletin Admin CP will let you know which templates are outdated when logging in. Your edits are not affected. You just need to make the changes that vBulletin requires.