Yes, Virtualmin just uses the software versions that come with the distro you’re using. We also don’t recommend using software from third parties, as that can introduce a lot of complications.
PHP is a bit simpler, as you can install a second PHP version alongside your existing PHP version.
But that’s not so simple with MySQL.
As diabolico mentioned, our recommendation in your case is to use a Linux distribution that provides the software you are interested in.
Virtualmin already support Centos 7 and it works great, at least on my test server i didnt encounter any major problem so its safe to go with Centos 7. There are few minor annoyances but this is one sided with Centos 7 and nothing to do with Virtualmin. But there is no OS what would come and work perfectly without at least some minor modifications.
I would stay with Centos as its proven to be secure and stable OS.
Though the documentation and official site of inoERP mentions MySQL 5.6.17+
I have been running it in MySQL 5.1 with out any issue.
So, go ahead and install it
Centos 7 will have MySQL/MariaDB 5.5 and NOT MySQL 5.6.
I cannot find any supported method to upgrade to 5.6
This is quite serious for us as we are an eCommerce provider who use Virtualmin on Centos 7 servers, and we cant even provide Magneto version 2 as MySQL 5.6 is a requirement. We have now lost business because customers want Magento 2 and we cant provide it. We do not want to use Ubuntu.