After much trouble I was able to restore to a previous backup. So it's working now, without the new update.
But now what? If I can't trust Windows Update to not break everything, what shall I do? Turn off Windows Update entirely? Refuse to accept any new versions of Windows 10? I don't feel I can trust Microsoft after this.
Generally speaking, assuming that there is no actual hardware issues, most of the problems that result from installing updates are going to be linked to third party software products.
Like the issue Regedit32 pointed out earlier
https://www.windows10forums.com/threads/notice-if-you-are-using-norton-360.10916/
Personally I had a terrible problem with the "watchdog" component of AVG after an update which cost me a good amount of time to resolve.
I think with all the updates coming so fast and furious from Microsoft that a lot of third party software vendors are frantically playing catch-up.
My suggestion would be....
IF you are having trouble with a particular update or group of updates.....
Uninstall any third party security suite software (you can't really disable them), then clean boot the system
https://support.microsoft.com/en-us/kb/929135
See if that allows the update(s) to be installed without issue.
IF so then reset your clean boot changes to normal state and re-install the security software (after checking for the most recent version and subsequent updates for it).