It would be nice to see the auto-upgrade function fill in a more balanced set of weapons and defenses rather than stacking it all in too one type (when you actually have more than one type of weapon/defense)

I agree, I was upgrading with that button.. then today I upgraded it all manually for about 45 minutes or so. Nothing was upgraded nicely with the auto upgrade button. Like you get a new ship design researched and it puts flak defenses and only missiles on it. No shields, kinetic weapons no beam weapons nothing. So I designed all the millitary vessels from scratch and modified all the existing ones. So now I got cruisers with kinetic and beam weapons and defenses n such and cruisers with more missiles than kinetic and beam weapons. Works alot better and I lose less ships, cause they weren´t up to date at all. As mentioned in the 1st post.. the auto upgrade doesn´t really do it´s job, atm better off doing it manually.

I have noticed this, too.

ATM making it yourself is the only option.

The computer seems to select the most recent researched weapons. Also auto-upgrading never makes use of the extra options like the module that gives you 50 extra weight to put inside your ship.