You have to ensure that the KF account that you create is exactly the same name as the paid fare ticketed - ie dont put middle name in the KF account if your middle name is not on the paid ticket. Same goes for the redemption nominee.

Assuming your paid fare is one that miles are able to upgrade (the discounted fares you cannot) you then need to ring SQ to see if any upgrade seats are available and if not you can ask to be added to the waitlist (if available). Note that upgrade inventory is different for redemption inventory (even though same fare letter) - for example I am on a waitlist for SIN - SEP business seat upgrade which is I class on a paid ticket, but there are straight out redemption seats in I class available on the website.

There is no need to transfer the Velocity points until you have the actual upgrades available. Once they are available (either over the phone or later through waitlist clearing) you can transfer, happens instantly so you can do it whilst you are on the phone. After all that, yes you can then add your VA numbers to the travel and get VA points and status credits for the fares paid.