You can check with the oracle support center on the compatibility of upgrading the RHEL 5.4 to the next and latest level. That would be the best suggestion on your question.
From my experience it is much better to migrate to higher one. linux sometimes is very crappy on upgrade.. sometimes it breaks and hard to find answer. but with migrate you knew that that is new. And also if you encountered issues with your 5.4 before much better to have new.