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If I upload a field (from a CSV file) using the update record pathway through the data loader and the field value is empty, by default does SDFC not overwrite the cell?
Does it only update if the existing field is non-null or null and then has a new value?
If this is the case, any suggestions for updating non-null (but outdated) fields to null values through this process?
It's not salesforce.com that does this, but the data loader itself. It's meant to protect you from accidentally clearing fields. To enable writing nulls, start the Data Loader, close the initial wizard, click on Settings, then check the "Insert null values" option.
