What you describe is absolutely normal on routes with high loads. I typically buy my tickets 1-2 days before departure (thanks to HON booking guarantee). On the routes I travel most frequently, I normally cannot get a seat assignment anymore. Or only in "baby class" (the last row in C-class in front of the first row of economy with all the babies, at least on some aircraft), which I decline. At check-in, about 60% of time I am assigned a business seat from the seat pool that is reserved for allocation at check-in (btw: some airlines reserve 40% of seats for allocation only at check-in). Rest of the time, I am upgraded. I feel it helps a little getting upgraded not having a seat assignment, although technically it should not make a difference since LH agents are supposed to follow strict rules by status and booking class. If you are not a HON, your chances for an upgrade are really tiny.