Of course you can integrate updates into a GNU/Linux CD - I've been doing that since at least 2007. That's where nLite got the idea to do it for windows (http://www.nliteos.com/),
and that's what forced MS to get on the bandwagon.
In some GNU/Linux distributions making a custom liveCD (including updates, installed software, your own users and configuration etc.) is as simple as running the wizard from the system menu (PCLinuxOS and Mandriva for example). I've never needed to do this in Fedora, but there is a detailed Wiki on the subject: https://fedoraproject.org/wiki/How_to_create_and_use_a_Live_CD
You can also make your own custom repository and burn to CD, then add it as a resource in synaptic, yum, or whatever other package management app you use. There are plenty of guides online on how to do this for RPM (including one I wrote but can't find).
Hope that helps.