On the top, there are several tabs, one of them is "Units and Force Settings," click on it and click on "Unit Settings and Attributes." Inside there, look for the unit you want to modify and near the middle you can change it so you get more armor points when you upgrade armor.
Umm... no. The armor setting on the Units and Heroes settings board is base armor--armor the unit has before it gets upgraded. As best I can tell, there is no way for each armor upgrade to increase armor by more than 1 point.
Damage upgrades, OTOH, depend on the bonus damage attribute. So, if you want each upgrade to increase a unit's damage by 10 points, set that unit's damage bonus to 10.
Ghan has said he has fixed this. Monovertex please confirm this fix. This was only a problem with people that had signatures in the upper levels like not the special members but the respected members.