They send the upgrade offer to a lot of people (not just you two), so you don't know if anyone else got it. Furthermore, they might have allocated only one seat for upgrades and kept one in case a pax wishes to book J in the final day.
Also, the number of J seats on a European flight is variable. They can move the curtain up or down affecting availability at any time.
Regarding blocking Y seats, that is not uncommon for pax without status or low fare. FB G or P and full Y fares could have access to a wider selection of seats. And your statement that the plane is like empty cannot be derived from the EF info you posted.
It's too late now, but it is usually possible to get better seats by checking periodically closer to departure.