From my experience I would assume that while packages and modules are running they are held in memory and don't refer back to their copy on the hard drive much. You can see this if you run a program in ubuntu and then remove the related packages while its running. It will keep running, but if you close it, you can't restart it.
I would assume the same happens with a distribution upgrade. All of the packages related to the original version of ubuntu are still running even though they have been removed and replace with the new ones, so when they are finally stopped on a system restart, the new packages take over.
If you're not getting an option to upgrade then your local mirror might be out of date, you can either wait a bit for that to resolve itself, or manually switch to another mirror. You should also make sure your software properties settings are correct.