I've upgraded a couple of servers to 8.8 from 8.7 successfully with the newly checked in package that's under Evaluation. My question is although the upgrade doesn't ask you to reboot the server after, is this actually necessary? As I dont really want to reboot 400 servers after upgrade?
No. You do not need to reboot them.
There are some theoretical areas where you could run into trouble. For example, any network connections open before the VSE network filter driver is installed would not be "controlled". If you do a manual install of VSE, it will give you this as part of the warning.