The upgrades are per segment, based on miles.
I believe each elite is allowed one companion. And there must be enough upgrades to upgrade each companion, so in your case you're short by one to do three people (if you can even have more than one companion).
Companion upgrades come out next year. And a multiple passenger itinerary cannot be upgraded with the 500 MSU, but can be with miles.
Upgrades using miles do carry over connections, specifically if you are going to New York to Portland via SLC, both flights would be using the same award per 'way'. Upgrades using 500 MSU's are per flight.