clean install: you make a backup, nuke the computer, install a fresh upgraded copy of the distro you want from a live usb, copy your data again to the computer.
upgrade: you wait ‘till the distro’ developers release an upgrade you can directly install from your soon to be old distro, you use a command like sudo do-release-upgrade
and why do you upgrade like that?
I upgrade when it’s a distro that releases new versions regularly (for example Fedora with two releases per year). I obviously also upgrade rolling distributions.
Why? Because it’s less work and I haven’t had many problems with it.
I usually clean install long-term distros like RHEL (or RHEL-based). These don’t always have a good upgrade path and I usually only use them on servers.