Upscaling is rather unlikely to help quality, so I suggest you should first consider not upscaling.
hqdn3d will only harm fidelity, but that's more of a theoretical concern if you happen to prefer the way the video looks after being filtered. I usually prefer sort of conservative options like "hqdn3d=4:4:3:3" or similar. If you at all like what that does to your video, you may consider that the first two parameters could be set higher for higher-def videos but should not be raised a whole lot on low-res videos. The last two parameters are temporal filtering, and as you may have already seen, you get an annoying motion-blur like effect if you overdo it.
But ultimately you have to accept that this is all subjective, and each video will be affected to different degrees and in different ways by this filtering.