Avoid /etc/*release* files and run this command instead, it is far more reliable and gives more details:
rpm -qia '*release*'
I assume that you've run yum upgrade. That will in general update you to the newest minor release.
Your main resources for determining the version are /etc/redhat_release and lsb_release -a
/etc/redhat_release
lsb_release -a
That's the RHEL release version.
You can see the kernel version by typing uname -r. It'll be 2.6.something.
uname -r