It's easy to understand, what is upgrade and update, please have a look.
Update: If Drupal gives minor change version like Drupal 8.0.1 to 8.2.0, so that is update.
Upgrade: If Drupal gives major changes version like Drupal 6 to Drupal 8 or from Drupal 7 to Drupal 8, that is upgrade.
Note: If have any suggestions or issue regarding 'What is the difference between upgrade and update in Drupal?' then you can ask by comments.
