how do you update the 7.0 to the 7.2? I've downloaded the zip file already, so I just need a push in the right direction as to my question.

Replace the whole FreiChat directory and install it again, but don't copy paste the code in the end as you have already done so.

I replaced the vendors/freichat with the newer version(7.2). When trying to install it, I get an error:
Internal Server Error
The server encountered an internal error or misconfiguration and was unable to complete your request.

Please contact the server administrator, webmaster@gamefacepage.com and inform them of the time the error occurred, and anything you might have done that may have caused the error.
More information about this error may be available in the server error log.
Additionally, a 404 Not Found error was encountered while trying to use an ErrorDocument to handle the request.

Any suggestions?

Make sure all the files and folders of freichat have 0755 permissions . except for the files

* freichat/arg.php &
* freichat/config.dat

which requires 0777 permissions.