IPhone – iPod 5 to iPhone

While there are (too) many ways to setup multiple iDevices on the same machine, the simplest way and most headache free is having a single account on all devices synced to the same machine. That way you can sync everything everywhere easily.

If you want to have separate accounts, set separate users on the machine and then you can setup different iTunes/Apple accounts on each computer user. But that will give issues with syncing contents. Apple is not very good with sharing content with other people - but they're trying to get better on it at least with family members.

Nope, the iOS 7 backup can't be restored to the iOS 5 device through iCloud.

iCloud Backup will backup almost everything on the device including the contents of /var/mobile which therefore includes your messages as well as other data. There is never any 'Messages' option in iCloud Backup, but if the backup was successful then it has been backed up.