TOPIC:

In addition also check \parent_templates\Nottingham\common_html5\js\ in your install directory - does script.js exist there? If not re-extract the xerte download over the top of your installation to make sure you have all the files.

You did download the full package not just the update?

Yes, I have the entire package. I'll give your suggests a try and let you know what happens.

/common_html5/js/script.js is not in the install folder. Originally, I downloaded and installed Toolkits 2.1 and then added the update 3.5 after that.

That’s why I asked that question.
You need to add the full 3.5 download not just the 3.5 update.
Also make sure you read/follow the upgrade instructions found in the documentation folder.

How will doing a reinstall affect the LOs I have already created? Is it safer to do a backup first?

You don’t need to reinstall. Read the upgrade guide.
If you try to run setup in the same location it will fail because it will detect the existence of database.php
If you remove that file and run setup it will break those existing projects.