Starting in macOS 12 Monterey, clicking an update notification did nothing. Before that, it opened the App Store app, though only to the main screen, not the Updates screen. It was frustrating, and unnecessarily so.
In Sequoia, however, Apple finally made this notification work as it should. When a notification informs you that updates are available, you can click anywhere on the notification to open the Updates screen of the App Store app. Once there, you can click individual Update buttons or use Update All to download all the updates.
Next, please fix the iOS software update notification, where it looks like there's no way to opt out of the update and that you can only decide when it will inevitably happen.