I have a few questions in regards to upgrading the RDS instance.
I don't think this is an on-topic question for StackOverflow at all, but some information anyway:
It's significant and depends on the size of the database. I've had it take an hour or more some times. I've also had creating snapshots, restoring from snapshots, and multi-az creation take around two hours before.
It depends on how you have things configured now. If you have Multi-AZ already enabled, then an instance upgrade will actually occur on the slave, then a failover will occur, then the new slave is updated. This results in about 1 or 2 minutes of actual downtime. The instance upgrade on the slave usually takes around 10 to 20 minutes, but there is no downtime in this setup. Note that when it does the failover, Amazon does a DNS swap internally so that your RDS endpoint points to the right machine, so you may have to restart your web processes that point to the DB so that they reconnect to the DB and pull in the new IP from a new DNS lookup.