What is the U going to do with all of the "extra" $500 and $250 seat license seats? Is there a contingency plan?
To go back to your original questions:
1) I don't think that there will be very many seats left once they go through the wait list, but I was told that if there were any, they would be used internally for sponsors, donors, etc. and that they would not be offered to the public at a lower rate. (It's the only way to protect the integrity of the pricing system.)
2) I think that they will handle things the same way they do now. You will get a renewal form with the option to retain your seats. If you want to move, they will try to accommodate you if they can. If demand is high enough, it's possible that you may not be able to move to a no donation seat. I would expect that they will work very hard to accommodate as many such requests as possible and I anticipate that there will be many people who want to move up or down the donation scale over time.
As for increased donation levels, I don't think they will do that soon or on a piecemeal basis. Instead, I think they will wait at least 4-5 years and then re-do the whole scheme if they can justify increases. I don't see them raising donation levels on a few sections and risk pricing folks who have been making donations out of the market and then not having places for them to move. If they really can't sell all the donation seats this year, they may lower donation levels in some spots for next year since no one will object to paying less than they do now.