Issue with installation and updating packages

I'm not familiar with how process works with Anaconda, so don't have any good advice there. In general, installing R on it's own tends to be fairly uneventful. One thing that you've came across is that current version (3.5.0) changed quite a few things, so not all packages updated yet. I would recommend for now to use 3.4.4 (previous version).

Also, just to make sure we are on the same page, RStudio and R are not the same thing. So, when you say that you've updated RStudio to the latest version you probably mean R. This thread should help:

Finally, are you sure that knitr is telling you to install pdflatex? I've checked my installation and I don't have this package and I can assure you that I'm using knitr quite a bit without it.