You do not have to back up and restore. All your data is saved in a separate file from the application itself. Just download and install the latest version in exactly the same fashion as the original version. No need to uninstall anything first. Manager installation process handles the change. The new version of the application calls your old data file.
Of course, it is always wise to routinely back up your records before doing an update and on a routine basis.
Yes. A backup file includes every transaction, setting, report, item, theme, etc. ever created for the single business you are backing up. The only things it will not include is those you have purposely deleted.