I don't think that BA are that concerned about who you are, it is likely though that your points will be read. But you don't need to concern yourself about an angry First brand manager turning up at your house to have it out with you!!

As for turning down upgrades, yes people do, for various reasons. Most often it is because they are travelling with some one else on a different booking or because they really want the seat they booked (window etc) and are not being offered the same in the higher cabin. For me having done night flights in both cabins I still feel that First offers plenty of privacy, although you are right that the new club cabin offers really good levels of privacy.