Is uninstalling 1.5 still the way to go?
No. It will do all of this for you. Just click and go. 
Am I correct in assuming that it won't overwrite what I have there?
You should not have been changing the source code directly otherwise you limit yourself in future updates. The only problem you would have is if you have changed the framework source code (this is done during the source code install anyway). As for the wrappers, they are installed whether you choose to install them or not. If you do not have the required assemblies for the wrappers then it will not cause you any issues. As for the databases we no longer ask a question and require them to be installed or updated during the setup process. There were too many people who would not install the databases at all which prompted many more support conversations.
Once installed, Is the only thing I need to do to my project is to change the references from 1.5 to 1.6?
Correct.