You can keep older versions installed and they stay as completely different apps. I have 8.5, X3 Studio, Professional and Platinum all on the same computer.
You do not need older versions to get the new version.
I just never bothered to uninstall them and I keep 8.5 to get a few plug ins that are not on the new list.
You should qualify for upgrade pricing.
For me the store automatically figures out how much I would pay for any given version.
You have to proceed to the checkout to get your best price.
As example Sonar Professional shows as $199 but at my checkout I pay $119 Can.
You can try the demo for free. This is the best page to tell you how each version compares.
http://www.cakewalk.com/Products/SONAR/Versions#start