If you fly with Etihad, are white in skin tone and wear a suit, they will likely upgrade you if the business section isn't full, as far as their halfway stopover.
You might have experienced it on your particular flight, but that's categorically not a policy (published or otherwise) of Etihad.
Some general points:
1. Airlines
will not upgrade you for free, unless the flight is full or there is some other problem/issue. That's the most basic precondition - there has to be more people booked than seats in the class you're booked in.
2. If they have overbooked in Economy for example, they will upgrade some people to Business in order to fit everyone on the plane since the alternative is to leave the excess behind (which would be highly undesirable).
3. Broadly speaking, whether you wear a suit or not is not the deciding factor. The airlines will give priority to their own frequent flyers (Gold, Silver, etc) for any free upgrades, as long as they're generally presentable. Being in a suit will not trump having a frequent flyer status.
4. However, check-in agents also sometimes need to select someone outside of the pool of frequent flyers. That's the bit where it helps to be (i) presentable (although I still don't think suits are essential), and (ii) exceedingly nice to the check-in agent.
5. Save the "I've hurt my leg" "I'm claustrophobic" etc stories - they've heard it all and then some, and it will generally ruin your chances unless it's very apparent (i.e. you really are 6'7 tall, or in a cast, and even then it's not a guarantee)
6. Don't walk up to the counter with any expectation of an upgrade - it's the best way to set yourself up to disappointment. Even the most frequent flyers are never guaranteed free upgrades, let alone those without any frequent flyer status. If you get one, great, but if you don't, you're still getting what you paid for.
7. Some airlines (BA for one, and a few others) do specially priced upgrades on their website or at check-in (for example, an extra £180 to go Premium Economy) which are substantially cheaper than purchasing the ticket outright.
Bulkhead seats are the ones which give you more legroom not less...
It depends on what sort of legroom you're talking about. There's more space around the knees because the seat in front is not there, but often you can't stretch out fully on a bulkhead seat whereas you can usually put your feet/lower leg underneath the row in front and stretch your legs fully.
The emergency exit seats are the ones where you get the full benefit of the extra legroom, but many airlines now charge you extra to sit on these. Very much worth it on a journey to Oz.