Help me understand Linux distros updates.

You can update your version of Fedora through the updater software as well but it's a very clear separate process that is initiated manually.

Distro version updates bring major updates to key packages - the one you'd notice most would be to Gnome, the desktop environment. There will be other things too that get only bugfix and security updates during the life of that version, and then after a while that version will lose support and you won't get any updates at all (https://docs.fedoraproject.org/en-US/releases/lifecycle/).

Updating is very safe and reliable. I've had my Fedora install at work for 3 years, updating periodically and it's working extremely well.

This is an imperfect analogy, but think of updating between Windows 10 and 11 versus installing updates on windows 10 or win 11.

I have no experience with Fedora, but AFAIK at least in Ubuntu/Debian land, updates are installed from OS version specific package repositories. When the version of the OS is no longer supported, those repositories might not receive updates anymore.

EDIT: this is the main reason I have a rolling release distro on most of my personal machines. The package repos have the newest packages without having to update my OS major version every now and then.

Is this something that needs to happen manually?

Yes, sort of. It needs to be initiated manually, but you should get an update notification, and the actual upgrade itself is automatic once you initiate it. Clicking on the notification will take you to the Software app > Updates section, from where you can do the upgrade.

If I solely update through the updater software, I'm not getting the whole "38"?

No, you will get the whole 38 (what makes you think you won't?). Everything will get updated. The key thing to remember is to update all other applications/kernel etc and restart your system first, before you do the actual OS upgrade. This is documented here: https://docs.fedoraproject.org/en-US/quick-docs/upgrading-fedora-new-release/#_upgrading_to_the_next_fedora_workstation_release

Some folks recommend disabling third-party repos before you do the actual upgrade, like copr, RPMFusion etc, but personally I haven't had any issues leaving them enabled - as long as you install all applicable updates and reboot prior to the upgrade, you should be fine.

If you want more control over the process though, you can always upgrade manually using dnf. Although there's not much benefit doing to this via the commandline (except for power users/admins who need the control/visibility), it's worth reading the post-upgrade tasks section to run some cleanup tasks (not a 100% sure if the GUI updater tool does this).

Permanently Deleted

Upgrading on Fedora is really easy from the software center. Never had any problem, never took any precaution.

But, of course, it’s always necessary to have a backup of your important files.

There is a distinction between regular updates and distribution upgrades. The latter have to be done manually. I know that distribution upgrades via GUI have been in the works; no idea if that is a thing yet.

https://docs.fedoraproject.org/en-US/quick-docs/upgrading-fedora-new-release/

As for what's missing: The most important thing to keep in mind is that fedora releases only get security updates for 1 year after release + some grace period depending on the date of the n+2 release.

Poorly upgrades often only work manually. They are like dates, sometimes more happens, sometimes less, so they may be a bit random, but its good to wait a bit and then upgrade, as they introduce new possibly breaking changes. Meanwhile the old version (on Debian and Ubuntu even multiple ones) still get updates, mainly security fixes, but on Fedora I think there are none, so in a different way non-major updates

ctrl+alt+t
sudo apt-get update
sudo apt-get upgrade -y
sudo apt-get dist-upgrade -y
sudo apt-get autoremove