5.2.7 is an enterprise version. Don't you have support from a Alfresco partner for your upgrade process?
You can (re)use the existing db - even on a new install. Just run the installer like for a fresh system and then modify the db and contentstore url in the alfresco-global.properties. What could be a real pain is how to upgrade the postgres binaries and update the database within your local windows directory created by the Alfresco installer(s). You should check if pg_upgrade is included in your bin directory. Some weeks ago I did a inplace postres upgrade on linux system for a > 400 GB alfresco db and that took ~ 20 mins but on that system we already stored the db in a postres installed from the OS package manager, not from the Alfresco installer. Also I'm not sure if inplace postgres upgrade is supported on Windows at all since the mechanism creates symlinks in the new install dir.
What do you think to take this as a chance to move your db on a independant system using an official Postgres installer/deployment? I would even encourage you to move from Windows to Linux in this step, which makes updates/upgrade/tuning/clustering easier. For this migration you would need to pg_dump and pg_restore once but you you may play with parallel dump and parallel restoration to reduce the downtime.
Rebuilding postgres' indexes and updating statistics would not reduce any table/db sizes. For that size I would guess something like 100 mio nodes/documents. If you think it should be less you could check the trash bin (archive store) and the trash cleaner.
