You can call SQ and split your passengers to different bookings, i.e. 1 adult (yourself) and 1 adult + 1 child (husband and child).

Upgrading with miles generally isn't good use for them, and is dependent on availability as well - just because a business seat may be available for cash purchase doesn't mean that it's available for upgrades.

KFEG status doesn't carry much weight in upgrade priority in SQ's eyes.