I think dev builds on FP3 are for users who have installed the eOS themselves and the stable builds are for the Murena FP3’s, bought from /e/. Maybe @AnotherElk (Fairphone afficianado!) can comment?
Backing up is a topic in itself.
As far as I can tell you should not have to manually install an update at this point in time. You could choose to update to the latest Q 1.5 and se how that goes. But I would say be careful how you choose what to update to from the list you have in your system updater. You can long press them to get the url to copy/paste somewhere and check the exact details.
Have a read of this weeks Development Updates thread, there is a paragraph especially for the FP3 with links to explainations of the differences between dev, stable, beta etc.
You may decide to try the OTA version update to R, for example.