So I chatted with Sneider(Love these names they come up with).
She confirmed, that Yes, an upgraded account will still reflect the back payment history. As far as getting a secured card upgraded to an unsecured/normal card, I would wait until you have a good score and apply for a new account. I would do this over the phone with a live person to make sure that this new account is being upgraded, and not just a new account with a new history and any payment history that has been reported has been converted over to the new account. Once that is good you should be able to close the account, get your full deposit back, and close the account with no dings on your credit report.