Is there a way to install and remove packages in a single yum command?

Yes. Invoking yum shell will allow you to specify multiple commands that will happen simultaneously when run is entered.

Newer versions of yum also have the swap command:

# yum swap -- install foo -- remove bar

As the accepted answer already says, you can use yum shell to run multiple commands at once, which is fine for interactive use. But if you want to invoke this command from a script, you can also run it against a file, eg yum shell translist.txt, where the file could contain, for example:

remove squid
install squid34

Append the -y switch to assume yes to confirmation prompts.