The Record Type selected on the Import Page must be the same as the Item Type. The error specifically says that the Type of the Item that needs to be updated is Inventory Item, but the Record type selected was Serialized Inventory Item.
1. Navigate to Setup > Import/Export > Import CSV Records.
2. Set the Import type to Items.
3. Set the Record type to Inventory Item > click Next.
4. Data Handling has to be set to Update > click Next.
5. Map the fields > click Next.
6. Enter an import map name > click Save and Run.