Thanks for posting on PI Square. Here are the answers to your inquiry.
SQL Express 2016 SP1 is supported. For the record, all version of SQL Server above 2008 R2 is supported. For more details on the requirements: Vision 2017 R2 -SQL Requirements
With regards to the upgrade kit. You only need the PI Vision 2017 R2 Update 1 install kit. There will be no need to install R2 then the Update.
That's great, thanks Jesse for reply