In most cases, the airlines will not let you upgrade a priceline ticket... they are usually consolidator priced.... and often not eligible for upgrade.
Priceline is correct.... they cannot upgrade you. It would have to happen with the airline... and most airlines will not "touch" the ticket... will not even allow you to put in a frequent flier number for benefits... much less mileage accrual.
You may get lucky with an agent... but not many people report success.