Everyone here is assuming there WAS in fact a large group there, that had possibly done online check-in. If someone was assigned to that room - group that had done online check-in or not - they could have been moved. No room assignment is set in stone. And to OP's point, what difference would it have made if they were down the hall? Having been in this situation before as a hotel employee, it sounds to me like the CM didn't want to go through the hassle, threw out the "a group is coming in" line, and hoped it stuck. It worked, because OP didn't express his/her displeasure.
True, if it is in fact a large group. No one on here, including OP, knows whether that was a line of BS or the truth. Any business, especially a hotel, will always cover themselves. Even if it was a group, they could have moved that person down the hall. Only exception would be a group that requires a secured floor, and we know this is not the case. As I said before, a hotel will not gamble with a complaining guest and will take care of who is in front of them - and deal with the other people later when they come in (if they come in). Think about it - if OP is in front of me complaining, and Joe is coming in later and may or may not complain, which one am I going to handle?
Most hotel chains offer online check-in. No room assignment is set in stone. All online check-in does is allow them to pre-assign your room based on your arrival time a day or two before. But everything can be moved. Why do you think they won't tell you what your room number is until you've physically arrived and the room is ready? Pre-assigning sure makes things easier and smoother, so no one wants to disturb the pre-assigned rooms. But CMs have the authority to move anyone. I guess it depends on how you ask, who the CM is, and how busy they are as to whether they want to or not. Even if you read the fine print on your reservation, all you are guaranteed is a room on Disney property, nothing more.
Contiguous rooms would not be guaranteed under any sales/catering contract. Sorry. The Front Office Manager of any hotel, especially one as busy as a Disney resort, would have a coronary before he or she would allow a Sales manager to do that. As for the "already checked in", online check-in just allows them to know what time you are coming, lock in your credit card, and pre-assign your room. It's not checking in in the traditional sense, and it certainly doesn't lock in your room number - not until you get there.
As for how Disney operates or doesn't.... I don't think any of us can really say. I just know the hotel industry well from my own work experience, and I can't imagine Disney veering too far out from industry standard.
As for being denied with credit card in hand when trying to extend, if the hotel is sold out or oversold, of course prior reservations take precedence. That is an entirely different situation from the original post.