Yeah, if it is not unlocked, have your carrier unlock it... Unlocked will open the phone up to a much wider range of customers. If the back panel is cracked or really scratched up, buy a replacement from Amazon and install it. Then clean it up and put it up for sale with some nice pictures using that new camera on the 5S.
Look at it this way, selling it for $300 will offset the cost of upgrading to the iPhone 5S... OR, since you were considering keeping it, and any money you make off selling it is bonus, you can roll that $300 towards the purchase of a Retina iPad Mini or iPad Air. Much better than a used 4S as a music and game player.