I am using Filemaker 17 pro advanced to make layout changes to a filemaker 16 pro advanced server. When opening a filemaker database remotely through show hosts, then making layout changes on the opened database: Will modifications to the layout be updated on the server without re-uploading to FileMaker server?
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Yes, assuming your account gives you such access. That said, it is not recommended to do live updates on production systems.

AndreasT
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I asked this because it seemed rather insecure to me in the first place to be able to even gain access to the filemaker server and open a project without credentials. I see that there is an option to Upload to Filemaker Server under File -> Sharing -> Upload. What is the use of this? Is it only for an initial upload of a database? – Student Here Nov 18 '18 at 18:51
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1Yes, it is for the initial upload. You should set up accounts and passwords to secure the access. – AndreasT Nov 19 '18 at 16:34