I didnt know intel graphics could be updated. What benefits (intel/dedicated or otherwise) does updating graphics drivers provide? Should I expect an increase in FPS?

It's hard to say as it's entirely based on the individual graphic driver in question. The best thing to do is read the update logs and read what the update states and whether it's updating performance of graphics or a technical thing like addressing software bugs.

By updating just the driver? Not likely. Might improve crash problems if you're experience that type of thing.

Edit: That said, if you're going to update it, make sure you use a driver from the company that built your system (if it's a major company) or the one that manufactured the motherboard.

Unlikely, Intel doesn't play the driver-level optimisation game anywhere at the same level as Nvidia or AMD.