To update through OTA i think you need to set up a Samsung account if you have not done this already that's probably your problem.
Some older versions of Kies were a pain in the butt for not recognising usb plugged in and was often because the drivers were buggered, your best bet is to fully un install kies, go to their website and re install it and you should get all the new drivers too.
Sometimes it is worth also trying to end task kies and try launching again I.e task manager and the 2 Keis programs that are running (KiesPDLR.exe & Kies.exe) end process / End Task them via task manager, then re launch kies, (kies probably opens and launches as soon as your computer is turned on unless you have used msconfig to disable start on boot
(to disable on start up using win 7 click the windows icon in the bottom left then in search bar type msconfig and enter, when ms config opens select startup tab and un tick anything with Kies) to disable start on boot
(This is presuming your running on windows and not Mac / Lynux)
