clean install: you make a backup, nuke the computer, install a fresh upgraded copy of the distro you want from a live usb, copy your data again to the computer.
upgrade: you wait ‘till the distro’ developers release an upgrade you can directly install from your soon to be old distro, you use a command like sudo do-release-upgrade
and why do you upgrade like that?
I always upgrade as I can’t deal with a clean install every so often. This warrants using a distro that does handle this well, though*. Which, thankfully, isn’t a big deal as most distros support this anyways.