The 4 hours and 3 hours before is not really a kink in the system. You would get the upgrade even if you did not call as long as you are on the list for requested upgrades. At the 3-4 hour mark what happens is that the last sweep for passengers that have requested uncleared upgrades and are not on the airport standby list is performed. If the number of sold seat is below a certain level, most but not all of the unsold seats will convert to confirmed upgrades.

It just seems like calling at that time works because if you are going to be upgraded that is the most likely time for it to happen.

Also of note, you can not really tell what inventory is unsold by looking at available seats on aa.com. When you see the chart you are only looking at unassigned seats. Some of those available seats are in fact sold but, the passenger has not chosen their seat. Their are occasions where the available seats will show half the seats free but, if you go to book a First class ticket you will see that the flight is sold out. Only a CSR can tell if a seat is really sold not the available seats chart on aa.com. This is perhaps the most frustrating misconception that I have heard on the forums. Why when aa.com shows an empty cabin, does your upgrade never clear.