Overbooked = More seats have been sold than there are seats. However, they will continue to sell seats as the no-show factor will still likely cause that flight to go out with empty seats, but you never know.

Oversold = No more seats are being sold on a flight at any price. All seats are sold and even with the no-show factor, it's probable they will have to ask people to get off the plane. Again, you never know. More people could no-show or get on other flights. Chances are better for a bump if the flight is oversold rather than overbooked.

The higher your status, the better the hotel they will offer you. You can ask for a specific hotel, that never hurts. You can also take the voucher for the Red Roof Inn that they give you and present it at the Westin and see if they will take it.