I think the FA did the right thing. He or she has to go by the BP, not the pda site. That's reasonable.
I think the issue here is that the GA ought to have scanned the BP. Clearly, the time was tight, but scanning the BP takes virtually no time. This should have solved the problem.
As far as being entitled to the upgrade, it's somewhat a matter of semantics. The OP purchased a coach ticket, but if CO issued an upgrade, there was a failure in the system somewhere that kept him/her from using it.
Since CO often upgrades passengers shortly before departure, there ought ot be a gormal procedure to insure against this ind of problem, especially in the case of tight connections.