#1: Yup, that happens, it's happened fairly often to me too. It's a weakness in the system, unfortunately.
#2: I'm not a program expert (imagine admitting that on FT!) but I do know that not all Hyatts participate in the suite upgrade program, or there are sometimes minimum stay or minimum room rate requirements. It would help us resolve that one if you were more specific about the hotel and dates you were trying to upgrade.
#3: We have a resident expert here on the GH Kaua'i, but even though I've been there only once, I can state with 100% confidence that a club room is NOT the equivalent of a suite at that hotel. Whoever told you that is just flat out wrong. Call the hotel directly, they are typically very accommodating unless you are there during an absolute peak period.
Now let's let the REAL experts opine!