In order to use the license(s) available in your customer portal, yes, you will have to upgrade to 9.0.
If you'd like to continue using 8.3, it's still supported and you can get extension keys from email@example.com.
For upgrades you have two options (in-place and out-of-place). Either way, a new set of bits are laid down. You have the option to use the same repo either way as we just have a pointer within the repo.properties file. On upgrades, we'll run the necessary DDL to upgrade our schema if it's an existing repo or lay down new objects if it's new.
Hope this helps.