Upgrading to AP Question

[supersnoop]

I assume it's only if the original tickets were bought directly from Disney?

Only tickets purchased directly and separately from Disney can be upgraded in advance. Tickets purchased as part of package can be upgraded as part of that package prior to arrival. All other scenarios must upgrade in person; tickets purchased from third parties or left over from past packages.

? So is the problem here that DVC MS can't process the refund/repurchase, and Ticketing can't process the purchase of a DVC Gold over the phone - so it must be done in person?

Ticketing can sell DVC passes, which is why we've suggested that the OP call back.

If I were to refund the tickets, would I lose the FP selections I currently have?

I believe FP+ are canceled on some sort of schedule, not immediately. So, as long as you have valid admission back in your account on the same day, you shouldn't lose your FP+.