Does Dynamics 365 On-premises version update require in both Server and Instance level

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Our Dynamics 365 application is hosted on-premises and recently our Tenable (vulnerability assessment) report highlighted us to update Dynamics version from 9.1.14.17 to /9.1.18.22/

We followed the article - https://support.microsoft.com/help/5026500 and we installed the updates on Server level only for our Dev environment. Post that we can see the updated version 9.1.18.22 is visible as per the attached screenshot.

However, we see that DB version / Instance version which is showing in screenshot is not updated. Also, we are facing error while updating the version on instance level. PFA image.

(Eg: Version 2104 (9.1.18.22) (DB 9.1.14.17) on-premises)