As I have a few item in my cart and am test-publishing. I am looking at the time it is taking.

As I only have 5 or 6 products right now...and upon completion I am looking at several hundred...I am a little concerned about the time it may take to publish each time.

Does re-publishing only update files that have changed, or is the entire site refreshed each time?

The first time you publish, a lot of info needs to be uploaded, but when you make changes to your shop, only the modified files are uploaded to your server.