Upgrading via miles is possible but it has two very specific rules...
1) fare class. You need to be ticketed in Y, B, or O class. If your ticket is not in one of those classes you can pay to be put in them. They are the most expensive economy and premium economy fare classes.
2) availability. Just because there is a seat open in business that does not make it available for upgrade. In general there must be I class available. I class is the fare bucket that business class redemptions come from. Generally there are not many I class seats available on any given flight.
Aeroplan miles usually aren't convertible into cash, the only exception I have seen is that you can pay the taxes and fees on an aeroplan booking with more aeroplan points. AMEX member rewards are more easily converted to cash. If you have a bunch of AMEX MR points you could pay the $1600 and call Amex for to apply your points against it. Not the best value, but still value.
for more info:
Aeroplan upgrade rules