And, the "next desirable unit available" isn't always a limitation. Sometimes, there are two or three more desirable units and it is possible to upgrade into any of them.
Presuming the ones in between don't get in the way.
OP, "automatic" basically means if it's available then you have to do it when you are aware it is available. WYN is not going to do it for us. Also keep in mind that if you booked a 2BR unit but want a 1BR-to-2BR upgrade, the upgrade has to come FROM the 1BR TO the 2BR. So you have to have an already booked 1BR, for the same dates, that will upgrade into the available 2BR.
As Ron has explained many times, mega-renters will pull both a 1BR unit and a 2BR unit for the same dates. At the 30 / 60 day mark (depending on VIP level) they will cancel the 2BR and then "upgrade" it in the online system when the 2BR unit comes back. It is no longer immediate online and sometimes the larger unit gets lost in the process.
If you want to practice the process (presuming your MIL has unlimited transactions) find a resort with lots of availability at the 30-day window, log in and do a short-stay search of 2-3 days, and a 1-2 day overlap of the dates in the search criteria.
Usually the winter mountain / inland properties will have more availability that anything beach, urban or coastal. Stay away from holiday dates because those will usually be stripped out months in advance. The online system will show you the "available upgrade" which will be an option to select and that qualifies for the "automatic" version of the upgrade. It's always based on availability.
If you see a 1BR, 2BR, 3BR and you want to go from 1-3, you cannot jump the 2BR. ChapJim isn't wrong, it can be done, (and done all the time by mega-renters) but it takes a bit of wrangling.
Some call this process abuse of the system. Others, not unlike yourself, consider it "maximizing" points. Wyndham created the VIP levels and gave them benefits of how to use their points. Good for you to be interested enough to help the MIL figure it out!