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A "software update" updates your existing version of the program to the current version, but does not upgrade it to the next major version.
Whenever new bugs are found and reported, developers develop fixes and offer them as a part of the software update.
In order to get the best performance from your computer, and most importantly, to stay protected against cyber-attacks and malicious threats, it is very important that you should not neglect any critical software updates.
Using an unpatched/outdated computer is like living in a house with no locks on the doors, inviting unwanted intruders.
Unfortunately, when the software is used by users in a real-time environment, they may come across several issues with the program and same gets reported back to the software vendor.
To address those issues, software vendors write patches for that particular software and release it as software updates.