So does the http://www.creationkit.com/Category:Getting_Started#Creating_Your_First_Plugin need to be updated?
You can be certain that most newcomers to TES will be using skyrim.esm, since that's what the official site recommends!
For an existing mod, can we simply change the master to update.esm on the File > Data panel without risk to the work we've done so far?
Yes, so I updated the wiki just now. The pic that was used as an example even showed Update.esm as a master to the mod file, which didn't match the text, so now it's consistent.
It's perfectly safe to add Update.esm after the fact. Though if your mod happens to have changed something it would have changed, your mod will still be overriding that back to an unpatched state.
Not only does the Update.esm create multiple unignorable instances, it will also certainly corrupt some of your related changes. From my experience it is much safer to do the changes made by official patches by yourself.
The only reason I'm aware of to base your plugin on Update.esm, are the changes to how smithing skill works since 1.5.
Also, changes in your plugin that are also covered by the Update.esm, will automatically create a dependance on Update.esm.
Multiple unignorable instances of what? I don't even know what you're trying to say here.
It's not going to corrupt anything by using it, and you can't really know what it's changing since there are no anolysis tools yet that most people will understand. Picking apart things at that level of detail isn't something the average modder should be worrying about. So using Update.esm will assure that they don't accidentally change something.
The smithing changes were hardcoded into the exe, Update.esm has nothing to do with those. The updated killcam records ARE in Update.esm though, and they can affect other records around them in the file since the originals in Skyrim.esm are larger. THAT can lead to corruption if Update.esm isn't used because the CK has no way to know otherwise.
Also it's not going to attach Update.esm to your file on its own. You have to do that. Though personally I wish they'd made it a hardcoded requirement from day 1. Then these issues wouldn't be cropping up now and everyone's mods would be in a consistent state as far as master data overrides.