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Just update it, ren'py keeps it's saves in the computer's AppData directory so you'll always have access to them. The only time using old saves doesn't work is if the creator says old saves won't work because of significant changes/reworks. This is usually a rare occurrence.

There should really be a wiki or something to keep track of all the characters across your games! Great update, even if confusing at times. haha

Storyline-wise it makes the most sense. Censorship dictates the default is "landlady" and "tenant" and "co-tenants" or "friends" or whatever between MC and Sky, but it's fairly clear they're mother and children with Klara and siblings. One could argue step-siblings, or foster mother and wards if you like and it would still make sense plot wise. Landlady and tenant is very amusing though, considering the reactions to the potential romantic interactions. Ch. 5 makes it pretty clear that the MC and Sky grew up in the same household though.

I've really enjoyed it so far. There's a review or two and some gameplay videos on youtube you could check out if you're unsure. They wouldn't have the smuttier stuff there but you can see everything else.

"Wait for a while" usually means it'll happen after you sleep and exit your room the next morning.

Raise the character's meter until the hint says "There are no more events for this character in this game version"

Just click on it, it should pop up saying "Equipped" and show up with a durability meter on the left hand side.