I run into this all the time. I just set up a Windows 7 Virtual Machine with Visual Studio 2010 installed. When I need a new project, I make it on that VM, then copy the files over to my primary hard disk and open them in Visual Studio 2015 Community, which has to have the latest VSTO installed. It takes care of any upgrades necessary (usually), and then do all my work there. I've got Visual Studio 2010 Pro on the Virtual Machine. I'm not sure if you can do it with the free Express version or not.
I always target .NET 4.0 in my projects. Haven't targeted 3.5 in a long time so I don't know if VSTO will work with it or not. I wouldn't be surprised to find you just have to change the .NET version requirement in your Project file and it works, but also wouldn't be surprised if it failed. .NET 3.5 to 4 is a simple and very low risk upgrade, so if you can't get VSTO to work with 3.5, I'd recommend adding a .NET installer to your installer.