The induction step is arithmetically clearer if done $\!\bmod \color{#c00}{ x^2},\,$ i.e. using modular arithmetic, i.e. using $\,\rm\color{#0a0}{CPR} =$ Congruence Product Rule), and induction hypothesis $P(n)$ the induction step is
$$\begin{align}{\rm mod}\,\ \color{#e00}{x^2}:\,\ (1+ x)^n\, \ \ \equiv&\,\ \ 1 + \color{#0af}n\:\!x\qquad\qquad\ \ \ \ {\rm i.e.}\ \ P(\color{#0af}n) \\[1pt]
{\rm\color{#0a0}{CPR}}\Longrightarrow\ \ (1+x)^{\color{}{n+1}}\! \equiv &\:\!\ (1+nx)(1 + x)\quad\,\ \text{by $\,1\!+\!x\,$ times prior}\\[1pt]
\equiv &\,\ \ 1+ nx+x+n\:\!\color{#e00}{x^2}\\[1pt]
\equiv &\,\ \ 1\!+\! (\color{#0af}{n\!+\!1})x\qquad\ \ \ \ \ {\rm i.e.}\ \ P(\color{}{\color{#0af}{n\!+\!1}})\\[2pt]
\end{align}\qquad\qquad$$
Remark $ $ Note how the use of modular arithmetic greatly clarifies the arithmetical essence of the matter, i.e. the inductive step of incrementing $\,n\,$ amounts to scaling the induction hypothesis congruence by $1+x$ then reducing that $\!\bmod {\color{#c00}{x^2}}.\,$ This arithmetic would be obfuscated if done instead using divisibility relations (vs. above (congruence) equations). This highlights the power of modular arithmetic - to focus on the remainders (and ignore the unneeded quotients).
This first $2$ terms (order $2$) truncation of the Binomial Theorem often proves useful in number theory, e.g. see here (and compare to Bernoulli's inequality).
The same proof works for $\,(a+x)^n,\,$ i.e.
$$\begin{align}{\rm mod}\,\ \color{#e00}{x^2}:\,\ (a+ x)^n\, \ \ \equiv&\,\ \ a^n + \color{#0af}n\:\!a^{\color{#0af}{n-1}}x\qquad\qquad\ \ \ \ {\rm i.e.}\ \ P(\color{#0af}n) \\[2pt]
{\rm\color{#0a0}{CPR}}\Longrightarrow\ \ (a+x)^{\color{}{n+1}}\! \equiv &\:\!\ (a^n+na^{n-1}x)(a + x)\quad\,\ \text{by $\,a\!+\!x\,$ times prior}\\[2pt]
\equiv &\,\ \ a^{n+1}+ na^nx+a^nx+na^{n-1}\color{#e00}{x^2}\\[2pt]
\equiv &\,\ \ a^{n+1}\!+\! (\color{#0af}{n\!+\!1})a^{\color{#0af}n}x\qquad\ \ \ \ \ {\rm i.e.}\ \ P(\color{}{\color{#0af}{n\!+\!1}})\\[2pt]
\end{align}\qquad\qquad$$
Generalization $ $ Using the above idea it is easy to generalize, e.g. from this answer
$\!\begin{align}\rm{\bf Theorem}\ \ \forall n\in\Bbb N\!:\ d\mid f(n) = a^n\! + b\:\!n + c &\rm \iff d\mid \color{blue}{(a\!-\!1)^2},\, \color{brown}{a\!+\!b\!-\!1},\, \color{darkorange}{1\!+\!c}\\ &\rm \iff d\mid f(0),\,f(1),\,f(2)\end{align}$