(It should be noted that the OP appears to have purchased two tickets for the $1300, given that the lowest fare that AA gives - in V - comes back at just over $650 per ticket).
The upgrade cost would only be charged if and when the upgrade clears, so by paying it, you'd get the J seat. (In other words, you don't pay 25k/$250 simply to waitlist.) Whether it's worth it, though, is a different matter. You may wish to check the cost of buying up to a higher fare class (namely, B) to decrease the cost of the upgrade. B upgrades are 10k each way per ticket, with no upgrade, so the $1k and 60k miles you save on upgrades might offset the increased cost of the ticket.
Mike