I've seen the upgrades for shards in the city menu before, dunno about for other structures.

Notification might be good.

Auto upgrading wouldn't be good since the closest city does the building/upgrading and you kind of wanna control when that occurs.

I think it only shows the upgrade for a resource if the city has swallowed it up 

 For auto-upgrading I sort of meant you should automatically get the bonuses -- this would basically reward you immediately for completing the technology instead of being delayed. 

Probably should just remark them with the exlamation point when they're upgradable.

Not entirely.

If you got 9 shards, 3 from level 0 , 3 from level 1 and 3 from each of a different element, you'll add 5 items to the list- each of the level 0 shards will be divided by the type of shard-resource it gives, while all the level 1 and 2 upgrades can be combined, since they only give extra mana. If a player wish to upgrade a specific shard, he could do it in the "old" (current) way.

I personally second this system.