Sounds like you're close, if you got your grill to connect to your wifi. When I was first trying to set up mine, my update also failed, and I never saw the prompt again, but was eventually able to get wifi working. I believe the update eventually happens in the background, once the grill is connected to wifi.
Try this next time. Make sure the app is closed all the way. Not running in the background. Turn off bluetooth, because you don't need it, now that your grill has your wifi password stored in it's memory via bluetooth. Unplug your grill. Restart your router. Restart your phone. Again make sure bluetooth is off. Now go plug in your grill and start it, to see if the wifi icon is on steady. If it's flashing, give it a minute or two. Once the wifi icon is on steady, you know it's connected to your wifi.
Now open the app and click on grills and wait to see if it shows your grill connected to your wifi. If it does, you should be able to control your grill. If prompts for update or doesn't work, keep doing this process over again. I believe it will eventually start working. Also, once it starts working, it seems to work every time thereafter.