Having to opt out of wars while hero is upgrading is a pain and often effects the rest of the clan, or means less clan wars.

Players should be able to use a hero whilst he/she is upgrading in the same way you can still cook troops whilst they are being researched in lab.

The hero should still remain their old level until the upgrade is complete.

They should only be avaliable on offence and defence (as they are today) in war attacks, and not single player attacks/defences

As an alternative it could be possible to use a small (maybe 10) gems to get a single uses out of hero whilst he/She is upgrading which means you can use gems to get a use for wars.
This may also bring extra gem income for supercell!