Updating a Prism Instance is pretty simple if it's in a format that can handle updating. Any modpack that I ship will be.
To update an instance you'll click edit on the instance.

On the left-hand side you should see either Modrinth or Curseforge. Click on that tab

If you're using a custom pack you'll only be able to "Update from file"

If you're using a modpack from Modrinth, you'll see something like this

This will only cover the "Update from file" as the other should be pretty self-explanitory
You will click "Update from file", then paste the link in the File Explorer window, finally hit Enter.

After hitting Enter your pack will update from the new version.
That's all there is to it!