Why my macbook pro heats up when I update it? It even makes cracking sounds, which scares me.

I've seen reports that this particular laptop will sometimes run the CPU at max with the fans running at high speed for no apparent reason. I don't see anything in the reports except that Adobe Illustrator crashed and and signpost_reporter is showing high CPU utilization (perhaps due to Adobe Illustrator?), but I'm also not familiar with some of the software you have installed. Make sure all your apps are completely up to date with the latest versions plus make sure all those apps are compatible with Big Sur. Maybe another contributor can chime in on your installed apps.

Google Chrome is known for making a computer run slow and hot at times.

Also run Disk Utility First Aid on the hidden Container. Within Disk Utility click on "View" and select "Show All Devices" so that the hidden Container appears on the left pane of Disk Utility. Even if First Aid reports everything is "Ok" click "Show Details" and look through the report for any unfixed errors. If there are any unfixed errors listed, then you will need to erase the whole physical drive before restoring from a backup or clone.

Try an SMC Reset and run the Apple Diagnostics.

If all your third party apps are fully up to date and you've verified those versions are compatible with Big Sur and First Aid doesn't list any unfixed errors, then you can try reinstalling macOS over top of itself. A bit more drastic option is to perform a clean install of macOS by first erasing the whole physical drive before installing macOS. Then just migrate your user account(s) and data to the clean install. Manually download the latest versions of all your third party apps and reinstall the third party apps.

I have encountered the visual effect you see when you force power off the laptop. It is hard to say whether that is "normal" or a sign of a problem (hardware or software).

As for the cracking sounds can you provide a recording of the noise for us? I'm not sure if this is a loud popping sound or if it is more of a light crackling sound. I've seen fans on the recent USB-C Apple laptops will get a light crackling sound, but the noise may only occur at certain fan speeds. The Apple Diagnostic will perform a fan speed test so it will give you an opportunity to see if the cracking noise is associated with the fan.

If you end up performing a clean install as I've described and you still encounter the same issues, then have Apple or an Apple Authorized Service Provider examine the laptop to see if they can identify any hardware or software issues that may be causing the problems. You can also take the laptop to an Apple Store or AASP to have them check out the laptop for the cracking sound if it still concerns you. The Apple Store will look at your laptop free of charge.

First it is normal for some macOS updates to require a system reboot (sometimes a couple reboots). It is just how Apple has elected to install some macOS updates.

If you have a grey screen, then it sounds like you have an older model laptop. What is the exact model of your laptop and OS? You can get this information by clicking the Apple menu and selecting "About This Mac".

If your laptop uses a hard drive, then perhaps the hard drive is failing. Or perhaps you have a fan that is making noise if the fan is running at higher speeds than normal during the update. Run DriveDx and EtreCheck and post both reports here using the "Additional Text" icon which looks like a piece of paper. These apps will help us check the health of the hard drive and also look for possible software issues plus it provides us with the exact model of your Mac.

With the EtreCheck report you need to click on "Share" or something like that and select "Copy" IIRC. Then you need to paste the reports using the "Additional Text" icon which looks like a piece of paper. For DriveDx you need to click "Save Report", then open the text file and copy & paste the contents here in the same manner.