After several hours of waiting, it finally got the latest update! Not sure how though...Here's what happened:
Windows Update was stuck for over an hour at the 'Preparing for installation 32%" step. I closed every other program and waited for about an extra hour and it finally started working (I wasn't using my laptop at all for an hour + it was charging). I restarted my laptop, but the update failed (I did not even see the black screen with the circle).
I opened Windows Update, clicked "Check for Updates" and I was asked to restart my laptop (again). I restarted it and after a couple of hours everything seems to be ok.
I'm not sure if this helps in any way, but I wanted to share my experience with others.