I have connected a Subversion Edge server to my TeamForge server as a replica server. Can I upgrade this server to Subversion 1.7.x?

Yes. Just install the latest updates to Subversion Edge.

Note: Until the master SVN server is running Subversion 1.7.x or later, the replica can only expose Subversion 1.6.x features to the clients. This mainly means that clients cannot take advantage of the new HTTPv2 protocol improvements until the master has been upgraded to 1.7.x too. Subversion Edge takes care of all the details -- there is nothing you need to do or configure.