Will this package only work up to React 16 version?

When you get a message like this, there's always a chance it will work anyway but the authors of the package don't guarantee it and likely don't test it. You can install with npm i --legacy-peer-deps react-form-input-fields (or a number of other ways, but that's both the easiest and least likely to do something terribly wrong) and then test a lot to see how it goes. Or you can use react@16 instead of react@17.