As a part of website maintenance updates are extremely important. There are different reasons for updates to be done, and below we'll list the three main types:

1. New features - Sometimes an update will bring for you new features that a previous version of the same plugin, theme or addon did not offer on the initial release. On the flip side there may also be features or functions that have been deprecated and or removed so one needs to be careful when doing an update for this reason.
2. Vulnerability fixes - All applications are subject to attacks and when a vulnerability to a plugin, theme or addon has been reported the developers will speedily create a fix and send that fix out on the next update. These updates need to be applied as soon as possible to keep your website from potential damage.
3. Bug fixes - Applications sometime prove to be buggy. When a bug is reported to developers then a patch is created and released soonest in order for the website or web application not be subject to a bad reputation. 

In any event, when updates are applied it is best to note the update version. Versions are usually numbered with 3 digits separated by two periods. The first number represents a major release and similarly major caution must be used when applying the update. The second digit represents a minor update. Whilst attention needs to be applied it is not common any major changes have been done to disrupt the website. The final number represents a patch. This is usually applied to a quick fix with the likelyhood of major changes being applied is very uncommon.