It normally gives a reason for not activating but reading between the lines it sounds like you have no cellular bars at the top of the screen? Maybe No Service?
The 'update' it may be talking about is a cellular update. Normally done before resetting the phone.
So
With the iphone still turned ON, slide out the SIM tray, then replace it. Do it again. Then restart the iphone. With any luck it will update the carrier settings.
Aternatively borrow another SIM to activate the phone then swap SIMs. You will have to reset the iMessage and Face Time settings.