You have two options to upgrade the hosts:
1.) Do an interactive upgrade using the ISO-Image through iLO, or a burned CD-ROM.
2.) Upgrade from the command line
With the HPE offline bundle (.zip file) uploaded to a folder on a datastore, you can upgrade the hosts using the following command (assuming you don't have any additional/individual drivers/vibs installed):
esxcli software profile install -d /vmfs/volumes/datastore/folder/offline-bundle-name.zip -p <profilename> --ok-to-remove --dry-run
Note:--dry-run can be used to evaluate what's going to happen without actually changing anything.
If the command's output looks as expected, run the command again without --dry-run, and if it completes successfully, type reboot to to reboot the host.
To find out the profile name for the upgrade command, run:
esxcli software sources profile list -d /vmfs/volumes/datastore/folder/offline-bundle-name.zip
Before upgrading ESXi, I'd suggest you upgrade the host's firmware using HPE's latest SPP.
André