So, I think the follow-up to your original question is...

Yes, what you are thinking is correct. If you are booked in "Y" and not immediately upgraded, that means the advanced upgrade fare class (either V or X depending on the flight) is 0 and you'll likely have to wait and see how you stand at the airport.

I do believe, however, that as a Y passenger, you'll be very high on the list regardless of your medallion status... Someone might want to verify that.