How to update and older version of electrum on ubuntu 17?
how would I go about updating electrum? What command would I use to
  update?


There are couple of ways to do it:


If you downloaded the official package (tar.gz), you can run electrum from its root directory, without installing it on your system; all the python dependencies are included in the 'packages' directory. To run Electrum from its root directory, just do: ./electrum
There is also PPA package repository, but I think they didn't update it.
I've a shell script, this script check the github source, download the last version and save the backup of an old wallet. You can find it here.



  where are the electrum files installed that contains my private keys
  and wallet?


On the Linux machine, there is the folder ~/.electrum which contains your wallet, configs and other.