I have a Yamaha fg700s and when i go play higher end guitars in the shop i really want one. Others have told me my guitar is fine,no need to spend 700 or so on a new one, it probably just needs to be setup.
I have had this guitar (my only one ever) over 3 years and from the day it came out of the box all ive done is put elixir light strings on it ,no adjustments. Is there a need to have someone do a "setup" on it? I am mainly a pure strummer and if it needs a setup who do i go to a Luthier ? Thanks
Setups will generally always make your guitar play better. If higher end guitars FEEL better, I'd recommend a setup. If higher end guitars SOUND better, save for one and buy it, you can't make a cheaper acoustic sound like a more expensive one.
By the looks of it your guitars seems to be a low to medium-level acoustic (I've never played one, just going off the price, however it sounds decent enough to me in YouTube clips). You've been playing for 3 years, and if you think you deserve a better axe than go for it.

Also, do you change the strings regularly? If all you have done is put a set of elixirs on it 3 years ago then replace the string ASAP!! Thanks a crazy long time to only have one set of strings on. A new set will completely brighten up the tone you get and the feel.
I just play at home,practice alot..i change the strings fairly regularly,probably sooner than they need it and when i do they are extremely bright for a week or so til broke in. I just read things and people say never just take a guitar out of the box and play,get it "setup" 1st. I like mine and its the best 200.00 on the market it appears im just not sure it needs to be setup or i will mess it up if i do...Like doing some homework before i let someone touch it.
My music store owner was offended when i asked if it needed to be setup,he said they come out of the box like they are suppose to play.He isnt a guitar guy,he is a drummer,but appears somewhat knowledgeable.
I agree if it sounds better get it. Feel can be adjusted or altered.

I like no finish on my necks so I sand it off. I get that better feel
I polish frets when I buy gutiars for a smoother feel
I scallop my fretboards for more string control.

But for a setup it doesn't hurt but unless you've played for years you don't really appreciate it. I mean as long as you can stay in tune and there is little to no buzz honestly I wouldn't worry about it. All a setup does is make the neck slightly easier to play. That and of course intonation is done so you get pinch harmonics where they should be guitar to guitar.
Don't let people at stores tell you that it's fine right out of the box, especially drummers
What makes you want these higher-end guitars? That's what you need to ask yourself. As myself and Tallwood have stated, you can't change the sound of a cheap acoustic. A setup will improve playability, but the fact is that it will likely never play as well as a $700 guitar with a good setup.