Chance of upgrade varies by route and even plane type, but having flown J between MEL and BNE (2 hour flight) there is very little difference between Y and J in the onboard service. For example on 763 the Y seats are pretty comfortable and 7 across, while J is 6 across with a small drink tray between seats and maybe 4 inches more legroom. Not a great difference. Food is surprisingly similar (e.g. breakfast in Y is granola, pastry and fruit while J has heated eggs/sausage ... nothing thrilling). No bar service in J before a certain time of day; similarly no alcohol in the lounge before noon, or is it 4pm? Bottom line is that QF Y is a lot better than most airlines' shorthaul Y (heaps better than UA/AA/DL), and QF J is not as good as AA J shorthaul. Making the rather expensive upgrade not very cost effective.

As for upgrade chances/policy, that has been discussed a lot on FT, and fare basis and status does affect priority. My impression is that most domestic flights have empty J seats these days and all upgrades are cleared except at peak flight times.