While it is impossible for OP and for any of us to know based on the photo OP took of the gate display, it is most likely that the five UG's are -UP fares or certs which were upgraded a good long time ago (as early as when the tickets were booked).
In an oversell, the agent is correct, after CPU's, award tickets get the bump first. I'm presuming no CPU's on this flight, so the fickle finger of fate points to you.
In addition to the customer service gesture of $500, the COC provide for a refund of the fare difference (in miles), so you should see that soon (or may send in a webform request).
Downgrades happen on AA and DL too and the customer service gesture tends to be roughly the same. They don't happen on WN, but then again, there's no F ! So, jumping ship from UA won't do much good.