Most updates should be installable via the Application Manager, yes. They're known as Seamless Software Updates (SSU), and the Maemo team worked hard to make them possible during the time of Maemo 4. In general, full flashing from a computer via USB is expected to only be necessary for those "Gosh, installing/changing/deleting that was a bad idea!" moments, not for updates.

That said, this particular update is somehow unusual, obviously. I expect fanoush, qwerty12, and others are already quite keen on discovering what exactly the mysterious changes to the "lower stacks" were.