cannot update Drupal core with drush
To update core on its own try

drush pm-update drupal


A plain

drush pm-update


will update all modules, and then core.

Note that it doesn't backup .htaccess, robots.txt, or any other files that you may have modified.  I have gotten in the habit of doing a full drush archive-dump before core updates, and/or using Backup and Migrate in combination with having everything under git control.