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Q u o t e:
Another possibility (that will get me hate I'm sure) is that the instant you see an upgrade on a visible enemy unit, you are told.

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it would suck, because it would take away surprise factor of strats based on hardcore weapon/armor upgrading. Using SC1 as an example: fast +1 weapon would indicate zlot rush in pvz even without any scouting, melee/armor for zerg = preparation for heavy ultraling ownage, etc. When you scout you need to check stuff yourself. It's not like clicking enemy unit is especially hard task.

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Q u o t e:
I'm not talking about upgrades like marine shields here, I mean sheer damage quantitiy upgrades like +1/2/3 weapon damage, or armor upgrades.

Because a fully upgraded army of marines or hydras or such would surely look cool and be somewhat a deterrent for the enemy, plus it would give the enemy player an information about their upgrade and tech status via sight, and one wouldn't always have to click a unit to show their status.

I'm thinking of something like zealots having blue/green/red warp blades respectively to +1/+2/+3 melee weapon level, etc.

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Not all upgrades will have visuals, though we are trying to add as many as we can without making it too tedious or convoluted to tell. Upgrades like Zergling wings, Marine shields, Battlecruiser Yamato Cannons or Defense Matrix (new), and animated abilities like Zealot charge and Stalker blink will all show visually that they have been upgraded. Additionally, changing things like colors of warp blades could confuse team colors in battles.