.Net framework version problem using Plugin Registration tool

We are using CRM 365 on-prem version 9.

I created a workflow project, added reference to Microsoft.crm.sdk.proxy, Microsoft.xrm.sdk etc. They are all version 9.0.0.0. So my project target framework version has to be .NET Framework 4.6.2.

Then I installed plugin registration tool 9.0. When I tried to register the workflow, I got:

This plugin assembly uses version 4.6.2 of the .NET Framework. At this time Microsoft Dynamics 365 requires version 4.5.2 of  the .Net Framework for plugin assemblies. Rebuild this assembly using version 4.5.2 and try again.

Now I am confused on what is the problem. Am I using the wrong version of dlls or CRM365 V9 on-Premise is not using Framework 4.6.2? On the server, I do see the installed Framework version is 4.6.1. What version of Microsoft.crm.sdk.proxy, Microsoft.xrm.sdk etc I should use?

Thanks

Holly Li