If I re download each installer from the shop, will the need for updates be removed here then, so I can just keep the latest installer and delete all the updates stored here?
Disclaimer: I don't work for FSDT, but I am pretty sure my answer to your question is correct.
Yeah, all the downloadable installers are all up to date with the latest updates as far as I am aware. Usually when Umberto adds an update for a product, he mentiones that the full installer also then has the update as well.
The only thing you may want to back up or replace are any custom AFCADs you may have downloaded or worked on yourself, that way you dont have to fiddle with the newly installed AFCADs/ADEs. Personally, the next time I do a hardware update I will just download all the installers from scratch to avoid having to run all the updates, but I will back up all my good AFCADs that I have spent a lot of time working on for FSDT airports, that way I can install the airport and just overwrite the AFCAD with my version.