Sorry OP, but your expectations are unrealistic...
KL does not upgrade any at the gate...not their own FB members, and especially not members of other airline programs. You can use SWUs (on M or higher fares), or miles (if I remember correctly, on Y fares only).

Regarding the seat selection, you can not reserve seats on intra-Europe flights. No one can...they are assigned at check in. On intercontinental flights, it has been my (very recent) experience that seat selection, even if flying KLetal on DL coded flight, is not too much of a problem. Only thing that wasn't working correctly was online purchase of economy comfort.

KL "really not having their act together" is the result of DL's computer system not working at all with KL's...It has nothing to do with KL.