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#11
I am a bit confused about which procedure you are following.
To achieve what you want you can use the USB or the ISO but in both cases, you must boot to Windows normally and then run them from within it.
This method of updating is called a Repair install or an InPlace upgrade. It is explained in the tutorial Repair Install - TenForums
Just to avoid any possibility of doubt,
If you boot from the USB you are going to install Windows.
If you boot to Windows normally then use the Repair install procedure, you are going to update Windows and that is what you have said you want to do.
Denis