Joomla 3.4 upgrade

Hi,
I just received a mail from your team and told us to download the whole template again for the latest Joomla upgrade. If I do so will it break my site that I upgraded already? or can I do it from the server with one click button. Please advise!
www.vatigers.net

You have to replace files by copying. But you need to watch not to overwrite your customization if you had them. If you changed template_css.css it should be ok to keep old one

Does the same applies to extensions?

What files you update? Only the template ones? I used your hotfiles to install the site. Do I have to change anything else or just copy the template files? Please be specific. Thank you.

Yes only templates files