From the RCI site:
Complimentary Unit Upgrades & Changes
Here’s how it works: when you book your Exchange vacation, just let us know you’re interested in a unit upgrade or resort change.
Within two weeks of check-in, if one of the resorts you’ve specified, or a bigger unit at your confirmed resort becomes available, we’ll change your reservation and provide you with the details.
So you'll need to select when you book an exchange that you are interested in an upgrade, and if available within 2 weeks of check in, they'll upgrade you for free.
The bonus weeks will vary in quality. The further out you try to book it, the more availability you'll find. But you wont be getting prime time nearly anywhere. You can prolly get ski season in Colorado or Tahoe if you book far enough out. Orlando and Branson in the summer are also likely to be available. I've had decent luck with II's bonus weeks for those types of vacations. But for the most part, yes, bonus weeks are going to be excess inventory so you're best bet is to look for availability in resort heavy areas: Orlando, Vegas, Branson, Mexico etc.