Be sure to submit feedback to Marriott on the website about your experience at the property. Refusing to provide any upgrade on an award stay violates the elites benefit policy as well as there is no distinction between paid/award/cash+points etc. A stay is a stay for getting benefits and its pretty anti-guest that they stated no upgrades on awards.

If you don't get the missing $5 back then contest it with your credit card and they'll likely charge back the missing $5. I agree out of principle to not let it drop.

Sounds like while a nice new place, it has crappy management who are anti-elite and don't want to provide any benefits (the no room charge accepted at the on-site restaurant reinforces that since they don't want to provide points for charges) and are looking to make a quick buck. Occasionally I've seen hotel starbucks that don't allow room charge since their system isn't connected, but never an on-site restaurant.