Solved - I can confirm that an Activity is NOT needed if you want create a Button to update an Android AppWidget.
I have been able to implement my AppWidgetProvider class such that it registers an android.appwidget.action.APPWIDGET_UPDATE intent-filter with the Broadcast receiver in the AndroidManifest.xml, which then fires the onUpdate event in the AppWidgetProvider class (which in turn then runs the UpdateService).
<!-- Broadcast Receiver that will process AppWidget updates -->
<receiver android:name=".MyWidget" android:label="@string/widget_name">
<intent-filter>
<action android:name="android.appwidget.action.APPWIDGET_UPDATE" />
</intent-filter>
<meta-data android:name="android.appwidget.provider" android:resource="@xml/widget" />
</receiver>
The UpdateService in my AppWidgetProvider class then uses onHandleIntent to run a private buildUpdate method - which registers the onClick event with a call to setOnClickPendingIntent as follows:
// set intent and register onclick
Intent i = new Intent(this, MyWidget.class);
PendingIntent pi = PendingIntent.getBroadcast(context,0, i,0);
updateViews.setOnClickPendingIntent(R.id.update_button,pi);
Here is a link to some source code of a working example, which shows how an update button can be used to update a Twitter widget:
http://github.com/commonsguy/cw-advandroid/tree/master/AppWidget/TwitterWidget/