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Index statistics are utilized by sql server to derive the best plan for query execution.

Suppose I update the index statistics then can existing queries use the effect of updated statistics or does sql server need to be restarted so that the cached plans are reset?

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Updating the statistics would invalidate the plans in the cache, and the new plans would make use of the new statistics.

Further, even if there were a scenario that warranted clearing the cache, there are many much less invasive methods than restarting SQL Server, such as DBCC FREEPROCCACHE.

However, very rarely should you ever need to clear the entire cache.

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