Git receive.denyCurrentBranch updateInstead fails
First, you would need to add and commit before pushing: if you have untracked files, then won't be pushed until you do add and commit.
Second, "receive.denyCurrentBranch updateInstead" is only for git 2.3+ (February 2015): make sure you have the right version of git n the server side.
Should git be installed separately on the server? I have git 2.5 on my Windows machine. I did not install anything specifically on the server
Yes you need to have git on the server as well.