What do you hope to achieve with the upgrades? Even the lowest-end groupsets from the big three (Shimano, SRAM, Campagnolo) function well and are very reliable. Upgrades get you reduced weight, better looks, and small improvements in function. None of those attributes is particularly important on a commuter bike.

As for fit, it does appear that your bike is too big. Commuters don't lower the saddle. There is an optimal saddle height for each rider that is roughly determined by leg length. Once that's set, riders who want a more upright position use a higher rise stem to get the bars higher relative to the saddle. With a short stem (another sign your bike is too big) you can't get much rise on the bars no matter what stem angle you use.