Yes, the rear dropouts are also known as the rear forks, i.e the slots where the rear wheel goes.
Based on your measurements, your spacing is nominally 126 mm "OLD" (over locknut dimension) or 6/7-speed spacing. A current 8/9/10-speed wheel hub is 130 mm OLD. A 130 mm hub can be fitted into 126 mm spacing with a bit of a struggle. It isn't a real problem but some riders prefer to have the frame cold set to make for easier wheel installation. Try it a few times and see if you find it acceptable without modification.
Again, you will have to see if the brake shoes can make the 4 mm downward adjustment needed to align with 700c rims.