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You are correct that .Net framework 4.5 is not supported on Windows Server 2003, however .Net 4.0 is.<br />
<br />
<a href="http://msdn.microsoft.com/en-us/library/vstudio/8z6watww(v=vs.110).aspx" rel="ugc nofollow">.Net 4.5 framework system requirements</a><br />
<br />
<a href="http://msdn.microsoft.com/en-us/library/vstudio/8z6watww(v=vs.100).aspx" rel="ugc nofollow">.Net 4.0 framework system requirements</a>
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You are correct that .Net framework 4.5 is not supported on Windows Server 2003, however .Net 4.0 is.

.Net 4.5 framework system requirements [http://msdn.microsoft.com/en-us/library/vstudio/8z6watww(v=vs.110).aspx]

.Net 4.0 framework system requirements [http://msdn.microsoft.com/en-us/library/vstudio/8z6watww(v=vs.100).aspx]

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Thank you.<br />
Can I upgrade to Visual Studio 2013? I am not sure if anyone has started using it. Will it work with .NET framework 4.0?<br />
Please advise.
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Thank you.
Can I upgrade to Visual Studio 2013? I am not sure if anyone has started using it. Will it work with .NET framework 4.0?
Please advise.

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Yes you can use Visual Studio 2013 and target the .net 4.0 framework.
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Yes you can use Visual Studio 2013 and target the .net 4.0 framework.

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We have a web application built using Visual Studio 2003 and is currently running .net 2.0. We are planning to upgrade the application. However, the webserver it is hosted on runs Windows Server 2003. <br />
&nbsp;According to this link <a href="http://msdn.microsoft.com/en-us/library/bb822049(v=vs.110).aspx" rel="ugc nofollow">http://msdn.microsoft.com/en-us/library/bb822049(v=vs.110).aspx</a><br />
Windows Server 2003 is compatible with .NET 4.0.<br />
Does this mean I should upgrade to .NET 4.0 (Visual Studio 2010) and should NOT go to .NET 4.5 (Visual Studio 2012)?<br />
<br />
I have approval to upgrade the web application but we have not talked about upgrading the web server operating system. Can you please advise?
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We have a web application built using Visual Studio 2003 and is currently running .net 2.0. We are planning to upgrade the application. However, the webserver it is hosted on runs Windows Server 2003. 
 According to this link http://msdn.microsoft.com/en-us/library/bb822049(v=vs.110).aspx
Windows Server 2003 is compatible with .NET 4.0.
Does this mean I should upgrade to .NET 4.0 (Visual Studio 2010) and should NOT go to .NET 4.5 (Visual Studio 2012)?

I have approval to upgrade the web application but we have not talked about upgrading the web server operating system. Can you please advise?

.NET 4.5 compatibility with Window Server 2003

The successor to Active Server Pages, ASP.NET websites utilize the .NET framework to produce dynamic, data and content-driven web applications and services. ASP.NET code can be written using any .NET supported language. As of 2009, ASP.NET can also apply the Model-View-Controller (MVC) pattern to web applications

ASP.NET

Windows Server 2003 was based on Windows XP and was released in four editions: Web, Standard, Enterprise and Datacenter. It also had derivative versions for clusters, storage and Microsoft’s Small Business Server. Important upgrades included integrating Internet Information Services (IIS), improvements to Active Directory (AD) and Group Policy (GP), and the migration to Automated System Recovery (ASR).