Short answer is No, any existing settings won't be lost.
Long answer is... if a config file is already in place, the rpm mechanism will create a ".rpmnew" file. It shouldn't overwrite existing config.
If you have mlocate packages installed then after an update you could do an "updatedb" then something like "locate rpmnew" to see if you do indeed have any newer config files. You can compare to existing config files see if any CRITICAL settings are changed.
A kernel update will install the new one and KEEP the old one as well. You can remove it later when you're satisfied the new one boots correctly.
You could do a "yum update --exclude=kernel*" to update all packages except the kernel.
Simply doing a "yum update" should show you what packages are available to update.
You could install yum-plugin-downloadonly and do a "yum update --downloadonly" which does what it says - simply download any updates to cache folder on your server. Then if you do a "yum update" it will pick the packages from local cache instead. Useful for slow bandwidth links - some of my servers run that overnight to pick up updates required and when I get to them the packages are there so I am not twiddling thumbs waiting for downloads.
Finally, check out yum-utils. You can use "package-cleanup --leaves" which will list rpms NOT relied upon by any other rpm. Your judgement required as to whether or not you can remove them. "package-cleanup --orphans" will list packages you have installed that are not available in any of your defined repositories.