Hi,
Yes, as arnavsharma said, you can keep your files, settings when upgraded to Windows 8.1, only some Windows Store apps will need to be reinstalled from the Store, but it is always recommended to backup important files before upgarding.
If you choose to Keep nothing when you upgrade to Windows 8.1, please refer to this link to retrieve files from Windows.old folder
http://windows.microsoft.com/en-IN/windows-8/restore-files-upgrade-windows-old
For issue about "no explorer", press Ctrl-alt-del, then launch Task Manager\File\Run new task, then type explorer.exe, OK. are you able to get the desktop and explorer now?