Not sure about the rules for paying difference with cash, however, there are requirements about using miles to upgrade.
Upgrade and Airport Upgrade Awards are valid in eligible fare classes:
- Y, B, H, K, M, L, V (Economy Class) for upgrades to Premium Economy Class (for flights with Premium Economy Class)
- Y, B, H, K, M, L, V (Economy Class) for upgrades to Business Class (for flights without Premium Economy Class only)
I once paid for a M class ticket which costed more than a PEY ticket at the time of booking, just so that I could upgrade with my points (due to crappy company rules) =(