I'm attempting to update license keys and when I put the new key in, I cannot click on the Update button as it is greyed out. Is it required that I be able to connect to the marketplace server in order to do updates, as i can't.
Sorry for the delay. What product and version are you using here? Jira, Confluence, Bitbucket, etc? And is this license for an Atlassian product? Or is this license for something like plugin or add-on for that product?
I do not believe you need to have your application access the marketplace to be able to apply the license key.
There was a known bug in the Universal Plugin Manager (UPM) back from 2 years ago where the ability to update/edit a license key was not possible in the version 2.22.1, see details in https://ecosystem.atlassian.net/browse/UPM-5639
If you're using that specific version of the UPM with an Atlassian product, then updating the UPM first would be the best way to get past this issue.