Can I increase DC voltage using capactiors in series and then use a voltage regulator?
No, you can't use just capacitors to do that. They will just sit there and do nothing unless you use the caps as part of a charge pump which can increase voltage.
But it would be a bad idea to boost the battery voltage and then use a 7805 as that would increase losses and reduce battery life.
If you don't want to bother designing a switching converter, you can buy cheap canned ones that will convert your battery voltage to 5V. For a one-off design, the choice is easy between spending lots of time selecting components for a DC-DC, and a canned solution...
Note it is often the case that you think you need 5V but you don't. Most &quot;5V&quot; microcontrollers like the Atmega in arduinos run just fine on one LiIon cell without voltage regulation.