Dear Seaneo,
It is always recommended to keep the extensions updated. Please make sure that your Joomla is the latest version. So far, this would be the first instance where our template has been suspected for security issue. Please get the exact details of the security issue from your hosting company and we shall look into it.
Upgrade your joomla version to latest, there have been security fixes for Joomla and ask your hosting company to recheck, as the template should not be a security issue.
Yes, updating to new version is going to erase your customization. You should use JA Extensions manager to update Joomlart products, as it allows rollbacks and you can compare each and every file in conflict and move the customized code from the older file to newer file. This said, a backup is a must before you try to upgrade and best to clone your current site and do the upgrade work.
– Back up your template ( JA Elastica ) .
– Use JAEM component of the upgrade JA T3V3 framework, JA Elastica template to latest version.
– You can also use Beyond Compare tool http://www.scootersoftware.com/ for compare JA Elastica template new version with old version ( JA Elastica template backup folder ) to get your customizations and apply them to new version.
Hope this helps.
PS: please try back up all site befor be doing anything.
Regards