Hi Lee,
Just to be sure I understand, what you want to do is to update your iPad to the newest operating system? And you want to do this through iTunes, while your iPad is connected to the computer?
If you select your device in the iTunes window, you should see a page called Summary that displays information about the device, and has a button labeled "Check for Update." (I may be looking at a different version of iTunes than the one on your computer, but I think all these basic features are roughly the same.) Click this button, and iTunes will look online for the most current version of iOS that's compatible with your device. I believe this will be 8.4 (Yosemite is the name of the current Mac operating system, different from the one that powers the iPad).
You'll see a button labeled something like "Install Update" or "Update Now." If you click this, you may see a window advising you to backup your iPad first. Even if you don't see this window, backing up now, before installing the update, would be a good idea. There should be a button in the iTunes window to do that. When the backup is finished, click the "Install Update" button and relax -- it will take a while to download and install.
That should do it.