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Just an alternative to using your resources if you ask me, but you always want to look for the next best item for your build or keep a few sets in case you want to swap it around.
You don't need to upgrade anything before hitting ng+ and even then you can make do until you hit a wall.
all this is of course if your resources are limited
Neither is worth it. You get loot drops according to the area level and the upgrades of an item is regularly limited to 10ilvl above the base ilvl.
So the higher the base ilvl the better. Upgrading early is only a nice bonus which can help you out, but you will not use the items for long.
How does the hat specifically affect things? And thank you everyone else for the responses.