I find this quite dumb, ship units should be very limited in what they can upgrade to imo.
A Man of War shouldn't be capable of upgrading to any of the full metal ships, if it had an upgrade the upgrade would have to be a variant of the Man of War, like "Steel Reinforced Man of War" or something, but that is better covered by new unique promotion available to wooden ships with masts or something. A canoe shouldn't be able to upgrade to a galley and so on, if the upgrade requires the full construction of a new vessel, then it doesn't make sense as an upgrade.
Some units are manpower operating equipment while other units are equipment operated by manpower, the distinction I think should be in place, where the former has upgrades while the latter rarely should.
In other words, a rifle, horse or axe isn't a unit in itself that needs manpower, it is only the unit equipment, while a tank/frigate/plane is in a greater sense the unit in itself and the manpower is secondary.
Two classes of units: Expensive Warmachines manned by operators vs Equipped platoons.
In the first the manpower is more easily replaced than the equipment, while in the latter it is the opposite.