There are a number of ways magical upgrades happen. Online check-in or regular check-in doesn't matter. Most magical upgrades happen because a resort gets oversold in a certain category. For example, the room assignor we'll say on Monday is starting to assign rooms and sees that on Wednesday, Thursday and Friday we are oversold in standard view rooms. The room assignor sees we are way undersold on waterview rooms. So, the room assignor will just pick some reservations, probably ones that are there for just those 3 days we are oversold in that category and upgrade them to waterview or maybe CL if that's where we have rooms that are undersold. If they don't have enough reservations for that 3 day time period, then they will grab some reservations that are there for 4 days or maybe 5. That's the most common magical upgrade. We might be oversold in a room category and the only open rooms are on the CL floor that only sleep 3. Obviously we will look for people to upgrade that only have 3 in their party. Checking in at a certain time of the day won't matter either. It's just whether your reservation happens to fit what we need to fix our category needs.
Of course there are also magical upgrades that happen when we are not full and have rooms to "play with". Those upgrades can happen simply because a CM wants to make magic but a CM can't upgrade if there aren't available rooms to upgrade and remember, the rooms have to be available not just on the day of arrival, but for the whole time the guest is there. We might have lots of waterview rooms available on Sunday and Monday but only two available on Tuesday. With just two open on Tuesday, it's unlikely a CM will upgrade a family checking into a standard view room to a waterview room if they are staying longer than Tuesday. It's more likely to happen if we have lots of rooms available in the category we want to upgrade to for the entire length of the guest's stay. Why a CM wants to make magic is totally up to the individual CM. I can tell you that the easiest way NOT to get a magical upgrade is to ask for one. In my case, when I worked front desk, if a guest asked for an upgrade at check-in, if the whole resort was only 10% occupied, I would go back into the back, stand there for about two minutes, come back and politely tell them that no, there were no complimentary upgrades available but that there were a few paying upgrades available if they were interested in that.
My favorite magical upgrade: One time a family of four (two teenagers and a Mom and Dad) came in the front door and the father just stood there and stared around the lobby. He made no attempt to walk to the front desk. He had a huge grin on his face. He was a very very large man, probably 6'4" and the one teenage boy was huge like his father too. He just stood there and looked and looked and had the largest grin on his face. He finally shook his head, looked at me (probably because I was staring at him) and said, "I've tried for ten years to get the family here and it's finally happened." I started talking to him. His family was walking all around the lobby checking stuff out. He said he always wanted to come to WDW and had about ten different trips planned and one of the kids broke a leg, his parents or his in-laws got sick, the son was a football player and one time his team got in the playoffs and things just kept happening that made them cancel every trip. Although the other family members seemed happy, the father was the one that really moved me. He said he grew up watching Disney on TV on Sunday nights - he absolutely loved Disney! You could tell this was huge for him. He said the youngest child was going to college next year and he felt this was their last chance. He asked me so much about the different attractions and was like a little kid. He was in absolutely no hurry to get checked in. He just wanted to be there and soak in the fact that he was there. I knew we were not full ... it was during an off period (not the summer or during a holiday). And I have the most wonderful bosses in the world at the BC so I finally told him if he wanted to get his vacation started, he needed to check in and I walked him over to the front desk. By this time I knew his name and where he was from. I told him to make sure he stopped by and saw me on his way to the room as I wanted to write down a few restaurants I thought the family would really love. I went into the back office and talked to one of the managers and asked if I could really make BIG time magic. They checked the numbers and asked what I had in mind and I asked if the Presidential Suite was available for the next 8 days or a regular two bedroom suite and the Presidential was. They let me have it so I went back out and when he came back on the way to their room, I handed him a paper that I had listed a few restaurants on and asked him what room he had. He told me and I said, "why don't you wait one more minute and I'll see if I can't get you a little better view." I ran in the back, switched the reservation, printed out the new keys and went out and told him I'd walk with them to the new room. When we got in the elevator and I put the key into the slot to get up to the fifth floor, he asked me why I had to do that. I told him, "I upgraded you to the club level." The family couldn't believe it. They asked me about the CL, they had no idea what it was about. I told them about the lounge, etc. The kids were excited by the food!! By that time we were there on the fifth floor and I showed them the lounge and then I walked them down the hall. When we got to the double doors and I put the key in and we walked into the foyer, the father had this strange look on his face - maybe he felt all the rooms on the fifth floor looked like this. I said "welcome to the presidential suite". The oldest son literally picked me up and twirled me around. Those that know me know I'm not small. This is not something that most people could do. The father actually started crying. After I showed them around the suite, the mother decided she was not leaving it ever and especially the bathroom. By that time some of the managers had walked up to meet the family and it was so much fun.
Those things happen but rarely. He happened to be at the right place at the right time and the room count was such that the managers allowed me to do big time magic. That rarely happens ... an upgrade like that. But magic can happen.
My advice on rooms though is to book what will make you happy. Never expect or think you will get an upgrade. You should never look for one and if you happen to be at the right place at the right time and one happens, great. But if you are really really hoping for one, don't! Book the room that you want and then you will have a great vacation and not be sad about having a view you don't like.