I have a folder in the pi/home directory with python code. Is there a way to update (replace) these files by using one of the usb ports? I would like to be able to plug in the usb, reboot the pi, if there is a usb drive on boot, copy and replace the files in pi/home folder with the ones on the usb then automatically power back down.
Yes, you can.
First configure your Raspberry Pi to auto-mount USB Storage Devices (guide here).
Then create a script that checks the folders under
/media/ where the mounted USB stick would be. If it finds your scripts, replace the old ones with the new ones.
Configure your script to run at boot by editing your
/etc/rc.local (guide here)