Do you mean an update which changes the build number? Like Creators Update (Build 1703, April 2017), or the Fall Creators Update (Build 1709, September 2017)? With that update type, you can choose either an upgrade install, where your personal files, apps, settings are preserved (as much as possible) or a clean install, where what you are getting is, as you ask, a new install of Windows. In either case a large number of system components are changed for new ones, and you may well notice changes in performance. The size of the download ISO is around 4.4 GB with minimum options, which gives you some idea of the amount of software being deployed. The Windows.old folder, in line with this, will be multi-gigabytes in size. The Update Tuesday monthly releases are patches however.
[EDIT] I see that while I was typing this others have got there first!