A reboot is required because one of the application components was running and is therefore locked by Windows. The part of IISxpress most likely causing the problem is the IISxpress Status window since you probably have it running. It is therefore best to close and exit the window before upgrading.
The installation and upgrade process is handled by part of the Windows OS called the Windows Installer, IISxpress is at its mercy like most applications (including Microsoft ones). When installing or upgrading a live box you should probably plan for some downtime (even if you don't use it). Normally the installation/upgrade can complete in only a couple of minutes even with a reboot.