Totally depends on the trip.

For vacations with family, I want max space in the hotel room - that's why a lot of those trips are done at Residence Inn or at a hotel where I think I have a very good chance (or can confirm with extra points) to get a suite. On those, I'm also highly likely to fly Y since (a) to date, they have not been truly long-long-haul and (b) the kids don't get anything out of J/F.

For solo work trips, I generally don't care much about either the hotel or airline upgrade - I just want efficient service and the "basics" of the elite status in play to work well. Good airport processes, fast security checkpoint, efficient boarding, irrops support if I need it. At the hotel, fast check-in/-out, good lounge, high floor or corner room...I'm happy. My airline statuses are all mid-/low-tier these days so I don't really have high expectations of upgrades there to begin with. (Although US has had a surprisingly good success rate for me this year.)

For trips with my wife, we like to upgrade the flight if we can (this is where I spend the miles or other upgrade instruments) and then stay in the best possible hotels where status provides breakfast and lounge access. More likely to spend extra points for a high-category hotel here, but getting a suite isn't really a determining factor with where we book. Rather stay in a Conrad or St. Regis type hotel, even if it's just a very good regular room.