As I said, it depends. As long as it's only the expiry date that changes, there's a likelihood that you won't have to do anything. If the CC number changes, you'll almost certainly have to update it manually. However, it's not hard and takes about 30 seconds.
Not necessarily. Some card issuers do update Apple Pay automatically even when the card number changes. Chase bank, in the US, for instance, does that. I have a card from them and it's been compromised a couple of times. Every time that happened and my physical card had to be replaced with a new one with a different number, Apple Pay updated automatically, immediately showing the last four digits of the new physical card as soon as it was issued (and before I got it in the mail). Of course, Apple Pay continued to work without interruption every time. Likewise when the card expires: they also update automatically.