Just a few things to clarify how "check for updates" works:
a) It checks only the mods that have "Nexus Mods" as a source. If you've manually installed a mod and not set the mod source and mod id then Vortex doesn't know what file it is and can't track it. Unless...
b) ... Vortex queries a database during mod install based on md5 hash of the file. If this query is successful then Vortex should know what file it is exactly and have source and mod id set correctly. But this DB is still in testing and not super reliable.
c) Now when a mod is checked, the first thing Vortex looks for is if the mod author has used the "This file is an update of file xyz" option during upload. If he did Vortex should find the update fine.
d) If the mod author hasn't set an "update chain" then Vortex will see if the mod has only a single file that isn't marked old. Meaning: If there is only one update candidate, vortex will assume that is the right update file
e) If that fails too, Vortex can't tell you which exact file needs to be downloaded. However, if the file you have installed is now marked as old or doesn't appear on the mod page at all then Vortex will still tell you "there is an update but you have to pick it yourself"
Now the distinction in e is only really relevant to premium members atm. If Vortex has figured out the right file to download in c or d then Vortex will show a cloud icon. If a premium user clicks that he gets a direct download of the file.
If Vortex didn't figure out the right file you get a different icon that takes you to the nexus site and you have to search for the file to download yourself.
If you're not premium, even the cloud icon will take you to the site. This is because non-premium downloads are financed through ads and we can't afford to allow direct downloads in that case. Sorry guys
Once the update is downloaded you install it like regular. Vortex will tell you that an existing version of the mod is installed and you can either replace it or install separately. If you install separately you get a dropdown box for the version that lets you toggle between the installed versions.
This is particularly interesting if you play multiple profiles and you don't want to install the mod in all profiles (e.g. because of incompatibilities with other mods or because it would break savegames) but want to use the new version for a new char.
This is how it's supposed to work and how it worked for me during testing. If it didn't work like that for you, please report that through feedback. I can't remember having seen a report yet that says switching versions with the dropdown doesn't work. I did get a lot of reports though, so I may have just not come across it yet....