Let's talk about creature upgrades.

Being able to upgrade a creature is a double-edged sword. On one hand, you can still have army of a bit weaker basic creatures if you're short on resources, and upgrade them later, if ever. On the other hand, basic creatures may be underwhelming or completely useless compared to upgraded version (looking at you, Vampire Lords), and you are forced to spend a turn of building and extra resources on getting access to upgraded version of the creature.

The Heroes III approach of "ᴜᴘɢʀᴀᴅᴇs ғᴏʀ ᴇᴠᴇʀʏᴏɴᴇ, ғʀᴇᴇ, ᴀɴᴅ ʟᴇᴛ ɴᴏ ᴏɴᴇ ɢᴏ ᴀᴡᴀʏ ᴜɴsᴀᴛɪsғɪᴇᴅ!" is unhelpful at best. You can even tell that some creatures only had upgrades because they had to — way too many Queens and Kings for one army.

No. Upgrade is a privilege, not a right. Some creatures get that advantage of getting stronger if you pour some more resources into their training. Skeletons don't need an upgrade, their strength is in numbers thanks to Necromancy. Hippogriffs and Pegasi are already mystical flying creatures, they don't need an upgrade to present challenge on the battlefield.

Having said that, here are some upgrade guidelines I made for myself when thinking over factions and their creatures.