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All node data is stored in elasticsearch data directory. It’s data/cluster_name/nodes by default in elasticsearch home. So, in general, as long as data directory is preserved and config files in the new version are compatible with the old version, the new instance should have the same data as the old one. Please note that some releases have special additional requirements outlined in release notes. For example, upgrade to 0.19 from 0.18 requires issuing a full flush of all the indices in the cluster.
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There is really no good way to accomplish this. Nodes are communicating using binary protocol that is not backward compatible. So, if protocol in the new version changes, old nodes and new nodes are unable to understand each other. Sometimes it’s possible to mix nodes with different minor versions within the same cluster and do rolling upgrade. However, as far as I understand, there is no explicit guarantee on compatibility between nodes even within minor releases and major releases always require require full cluster restart. If downtime during full cluster restart is not an option, a nice technique by DrTech might be a solution.