How do I pass my objects to the update method?

As long as all of your mentioned methods are in the same class, you do not need to pass your objects to the methods - if you just declare your objects in that class. That is the normal way to do it.

This is not the same as declaring the variables "public". You can do that, if you want. But without declaring this explicitely, variables are set to "private" in java, thus restricted to the scope of their class. So just go ahead an declare your player object at the start of your class.

Where you initialize the objects is a different question. Usually, the init() method in frameworks is called ONCE before the game goes into its loop. As you probably would want to initialize your objects once, you can do that in this method. You can also create your own initialization method that only initializes some of your game's objects.

public static void main(String args[]){} is the method that is the starting point for any java-program IIRC. You can only initialize static or local variables here, though. But you cann call your init()-method from here and start the game loop.

public class Game{

 private Player p1;

 public static void main(String args[]) {
   init();
   //alternative: initializePlayer();
   //gameloop
 }

 public void init(){
     p1 = new Player();
 }

 /*private void initializePlayer(){
     p1 = new Player();
 }*/

 public void update(){
    p1.update();
 }

}