After digging a little further, it appears you are right... the hours counted need to fall under 135.243(a)(1), which applies to 10+ seats.

Aside from an earlier bump in pay, I'd have no incentive to upgrade earlier. From reading earlier posts, it appears beneficial to be able to wait a bit and at least have a little relative seniority before upgrade, as to open up options for base bid and avoid some reserve time.

Thanks for all the feedback, I'm open to hear any other tidbits of information anyone else might have that maybe hasn't been touched on in awhile! Things that people may not know to ask about, those sorts of things.