Hi Dru,
AC separates the relatively small SQL database from a huge folder full of the individual files that are imported items and scanned images.
This lets AC run a version update after a quick backup of just the SQL database, which may modify, add, and delete fields in the database.
(The SQL database includes small fields that contain just the path to each image and scan instead of the enormously larger files themselves.)
But yes, you normally want a full (and slower and larger) backup of everything, since you don't want to lose your images and scans.
How many backups you can do overnight depends on how fast your server is, how early you start, and how many scans and images you have. Most scanners and cameras can be configured to make much smaller files that are quite readable and viewable.
Cheers,
Carl Fogel