I'm using right now v7.4 on a 16Gb pendrive. Have a KNOPPIX_V7.4.2DVD-2014-09-28-EN.iso checked with md5sum.
My home size is 3.9GB.
Is there same way to upgrade to v7.4.2 on the same pendrive keeping my settings?
Is it possible to have a home of a greater size?

The version I am using now was made with pendrivelinux.