I installe the 16.04 / Kernel 4.4 / aarch64 image on my new M64. It says when I log in that it can be updated to 18.04. Will this actually work? Including a kernel update?
Only the system is updated, without the introduction of a new kernel. Kernel, if any is available, you need to update yourself
For that, you need to look elsewhere https://www.armbian.com/download/