Having not owned an iPhone, I just want to clarify: when you update an app, it does so in the foreground? That seems like an odd design decision. Would there be any reason for that to happen, as opposed to in the background (a la Android)?
Depends on what you mean by background. You can't use an iOS app while it is being updated (or in the queue to be updated), but you can do anything else. I'd call that a background update.