Using miles you are able to confirm the upgrade at time of booking, if the upgrade is available. Using e500 upgrades, you must wait until the appropriate time interval (72 hours before departure for PremEx) to see if your upgrade will clear. If you've booked far enough in advance, the mileage based upgrade is more likely to clear than the e500.

If no upgrades are available, at least you are in a position to clear a waitlist sooner too.

Once the flight is under the control of the airport and you go on a departure management list, all things are equal, it's other factors (status, fare paid, time added to departure management control list) that take priority. Your form of payment becomes irrelevant.