Exactly, upgrading weaponry and defense consts resources, but upgrading group size does not, even though the larger group would have cost more resources to create in the first place. That's the upgrade path out of the 3 that seems out of balance to me.

As it currently stands, if you have limited metal or crystal and a bit of spare gold, it always makes sense to build the smallest size possible and then upgrade, as you only pay the metal and crystal for the smaller unit size, plus a small amount of gold for the upgrade.

This doesn't make a great deal of sense to me, and does feel like a bit of an exploit. It would surely make more sense if you had to pay the metal and crystal for upgrading the unit size, e.g. if you move from a unit of three to a unit of four then you should pay a third of the crystal and metal you paid when you built the original unit.

I would prefer if I could chose what I wanted to upgrade to. I may not want to upgrade to the "best" item in the category according to what the game thinks. For example, it may make sense to keep the +initiative boots on the archers and not upgrade them along with the rest of the armor.

Yeah, it would be nice to be able to pick and choose which armour to get. But I'd consider that an extra feature, whereas zero metal and crystal cost for expanding the unit size just seems broken.