Do I need to re-install database server and create new database every time I update/upgrade ARCo?
No. Generally, you want to keep inserting the data in the same database. You just need to re-install dbwriter and Reporting software and during the installation supply your existing database parameters. If a newer version of database model is available, your existing ARCo database model will be updated during the installation of dbwriter. See Upgrading ARCo.