m2e provides the basic Maven integration for Eclipse Java based projects.
m2e-wtp are add-ons to m2e which provides Maven integration for Eclipse Webtools (WTP) based projects.
And yes, you can view update project configuration as the step needed to force eclipse to read the pom.xml and update the eclipse project configuration.
In some cases you can have pom.xml content that cannot be fully represented in eclipse, or simply just haven't been implemented yet - we have done our best to ensure most common scenarios we know of is covered - if you find something that is not matching let us know :)