One of the biggest problems with room assignments, IMO, is that Disney really doesn't tell us how it works. Recently in one of our DVC newsletters they claimed to use a system called "Rooms Ready." Under this system rooms are not even assigned to guests until they arrive at the front desk. Then, upon arrival, their primary goal is to get you into a room that is "ready" right then and there.
Apparently, as a whole, Disney guests put a higher priority on getting into their room immediately than they do having a room that meets all of their requirements to the letter.
It's this system that has lead to people advising arrival at the resort as early as possible. Those with late flights who may not arrive until 10-11pm will basically get the leftovers. These were often handicapped-accessible or (in the past) smoking rooms.
With all of that said, one of the main problems is that hundreds of members will tell you that the resorts were NOT using the "Rooms Ready" system when they arrived. Many will say that their room was already assigned (ready or not), and often it didn't even meet requests placed on the reservation. The requests are a tough thing to analyze given that if a resort has 100 rooms with a certain view and 200 requests, obviously many will be disappointed.
Thru our DVC stays, I'd say it was clear the resort was using "Rooms Ready" about half of the time. In those cases the CM actively engaged us in selecting our room. The other half of the time we were simply given our keys and room number (or phone number to call later to GET the room number.)
So the bottom line is you'll never know what sort of system they are using, but it's still best to arrive as early as possible. If you do arrive late and they happen to be using Rooms Ready, hard telling what you might get.
And as for your comment on upgrades, DVC doesn't give upgrades to members staying on points. There will be very rare cases where members are given a different room due to maintenance issues, but it's not like cash resorts where they will often upgrade people just because they have unbooked rooms available. DVC resorts will let larger rooms sit empty rather than upgrade members using points.