First off, let me throw out there that the forum search feature is in desperate need of advanced settings; A search on this topic gave me hits for WoM, FE Beta, and FE release... with no way to disgard/filter the mostly irrelevant.

  My thoughts on the matter are this:  Wounded units receive replacement troops gradually at rates that vary according to location.  When the technology exists to field larger unit sizes, it is the exact same principle… taking a new guy and telling him to, “Stand over there with those other guys”.  As a wartime veteran, I’m well versed in the complex concept of 2+2=4 (i.e., combining 4 squads gives you a platoon, etc).  There would be no additional costs involved apart from the increased unit maintenance (you are not charged a resource fee for natural unit), as a country with a standing military is in a constant state of training new recruits anyway.

  The only difference between a squad and a platoon is the abstract of logistics.  The number of available individual troops is an aspect based upon birth rate, training capacity, and allotted overhead… factors that are the preset foundation, yet beyond the practical parameters, of currently fielded units (that is to say, given a set pool of soldiers to draw from, you may arrange them however you are able). 

Let us upgrade when the tech allows, and have the upgraded units replenish as if simply wounded. Simple, and no complex lines of code needed to adjust experience levels or resource expenditure.