Yes. Flashing stock firmware will wipe your device, returning it to its factory state. All apps, settings, and personal files will be deleted. However, as noted earlier, if you can access the device, you can back up photos, audio, and documents without needing a backup password.
A flash file is the operating system of the phone, containing the system, boot, recovery, and user data images. When you flash your device, you are essentially erasing the old, corrupted software and installing a fresh, stable version from Huawei.
If the SD card method fails, you can use the computer-based SP Flash Tool.
The region code of your downloaded firmware (e.g., C432, C185, C636) does not match the internal hardware region configuration locked inside your phone's vendor partition.
The keyword you need is "Huawei Y7 Prime TRT-L21A Stock Firmware". Look for a full firmware package (often called "FullOTA-MF"). Be extremely cautious of unofficial websites that may offer corrupted or modified files.