Im assuming that the top sentence is supposed to read "I can
not upgrade..."
Make sure the unit to be upgraded is in a city.
That city
must have both iron and horses if it is to upgrade horsemen to knights. Obviously you need the tech to be able to build knights first.
Seeing as you are Romans, you will have problems upgrading
anything to swordsmen, as you cant build them

The game won't let you upgrade to special units unless they are defencives.
For drafting, you need Nationalism.