Y is an unrestricted economy class ticket, F typically means a Full-Fare First Class and C is a C Full-fare Business Class. You are correct, he means that if you are flying on economy class you can pay extra for better seats. I must add however that not all airlines allow for such payment (strictly talking of paying money for them, other factors like flying with a baby gives you a good chance of a bulkhead seat) and those airlines that take money will take lots of it. Like, British Airways.

An SWU is a system wide upgrade but what's a CC, I do not get grok that. Maybe one of those vouchers you get when you are bumped from a flight and he recommends trading points with someone who has that?