I have just upgraded from 15.04 to 15.10. I was asked if I wanted to have the obsolete packages removed, but since the option was going to take several hours...I decided to choose "no". I have found that it can be done via synaptic too, but is it necessary or useful at all?
Removing obsolete (not used) packages will free a good amount of disk space. it's not necessary, but it's healthy to do these removals to free up disk space.
I would definitely recommend to first check all the packages that are listed.
I removed "obsolete packages" whilst the update from 16.04 to 18.xx (LTS) Even though I use things like my php server, xchat, virtualBox, I unfortunately let it remove everything and .... it was gone. Fortunately their config files were left there, so a reinstall fixed it in my case. But be careful.
Yes, the package is replaced with a newer version or newer dependencies. So it's recommended to remove obselete after dist-upgrade