So. Lets close this off. This morning was the time we would find out.
Did I mention that celebrity runs a Move up offer, where you can place a bid for a higher level category. This was a balcony - plus sold out cruise, hence the original email so none of this made any sense. Yesterday morning I thought why not, and put in the minimum allowed bid for a cabin upgrade, at a price which was cheaper than the premium beverage package I'd bought. And around $10000 less than if I'd bought in our case, a basic suite outright.
So we have two things in play. I had no idea if one countered the other.
So this morning I received the email from celebrity. It was.........the UPGRADE!
But now, I had to explain all this to MrP. His head is still spinning. He just says he trusts me so he'll go with it.

.
So I've cancelled the premium drinks package, that refund will be in the credit card by Thursday. The payment for the upgrade has already been processed. While this suite doesn't come with the drinks package, there is a suite bar where all drinks are free, premium alcohol etc. And can be taken back to the cabin and into various areas. Plus an indoor lounge and an outside relaxation lounge which is new.
So, an interesting outcome. Turns out they only needed one cancellation. And it clearly wasn't a full ship as I know of three groups who got an unpgrade this morning. And we have a large balcony.