It depends on your needs. For most users, the upgrades provide enormous benefit. Updates are free. Upgrades are new versions with major new features. In the past these have been released after one to two years.
Updates are revisions to the same product.
Yes, we have designed it that way. Download and install the new version and it will automatically convert your data. At any time, you can either register or go back to your previous version. SaveAs to write out your data in the previous format. You can either install the new version to the same folder or a new one.