Help me understand Linux distros updates. - eviltoast

Hi I’m relatively new to Linux. There’s talk about updating, say from Fedora 37 to 38.

Is this something that needs to happen manually? If I solely update through the updater software, I’m not getting the whole “38”?

I understand that, of course, I won’t see updates on the installer or I won’t use a new supported partition type unless I install it again.

Apart from that, what’s missing? Some software won’t be updated? The kernel?

Thank you all!