A:Answer 1. ATMOS DOES NOT work when connected through ARC. You must connect the source into the input channel on the soundbar to receive Atmos. You also must be playing from a source that supports Atmos (the player, App, and media all must support Atmos.) There is no indication on the bar or on the screen when it is playing Atmos, but you can hear the difference if set up correctly.
The center of the TV should be at eye level when viewing, and the bar should be just under that for best vertical surround. If you are connected through ARC you will not see on-screen indicators telling you whether you have vertical surround activated or not, you have to toggle the button until you can hear the sound. If you connect the source directly to the HDMI input on the bar you will see an on screen indicator when you have changed any sound mode including vertical surround.
3. Upscaling is automatic. If you are playing a 5.1 source with vertical surround, that is what they consider upscaled to vertical. It is a marketing tool and not true 7.1 unless you were adding additional speakers, although you can hear a difference in the way the room fills with sound.