What good reasons are there for checking into a hotel online

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I still need a key / keycard so I still have to queue when I arrive, surely

Surely? Many large hotel chains (e.g.: Marriott, Hilton) offer digital keys that can be loaded on your phone and you don't in fact need to queue. If that's available for the hotel in question then you can in fact check in remotely and just walk straight to your room.

Would I be more likely to be upgraded if I arrive late without having already checked in if the hotel is busy

I doubt it. But all other things equal rooms are assigned on first come first served basis, so with online remote check-in you have a chance to choose a room that is more preferable to you.

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