They are very different concepts. If you were to patch the kernel, you would simply be updating the Linux kernel to address a very specific problem (hardware support, security vulnerability, etc). Whereas to install a new OS completely replaces everything on the machine and starts from scratch.
At the end of the day, updating the kernel is really no different than updating any other piece of software on the machine. The kernel just happens to be a very important piece of software that everything else depends on.
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