Originally Posted by
nydad
In others words, hotels can do whatever they want.

Yes, basically they are free to make up their own policies regarding suite upgrades. I find these upcharges to be very fair, as even with the supplemental charges the rate is usually much lower than the normal suite rates.
Originally Posted by
nydad
Do you happen to know what is the case with the straight award redemption on suite-level (or Chase-Hyatt suite award certificate, to be precise)? Do you still need to pay extra person supplements?
If you redeem a suite award, the maximum occupancy should definitely be the same as it would be if you paid the full suite rate. This could be the way to go if you would like to avoid paying the supplemental charges.