Unless you're on the other side of a large+ galaxy and at war. I can upgrade ships in 1 or 2 turns. It could take 5-6 turns for a new ship to reach the same destination. 

Well, I see that problem with resource consuming upgrades seems to be solved already, but as a new player to this game (jumped directly from GC2 right now) it saddens me how upgrade system works right now.

Insane costs of upgrades have completely no sense to me, especially when we compare it with the effort of building brand new ship from the scratch. I mean, c'mon, retrofitting existing design, especially if it is most commonly replacing some cannon, adding defense system or sensors should NOT be less economically sensible than building new ship. But it currently is, serious upgrade of one ship costs dozens of weeks of empire income, while building it from scratch is, well, is completely free from the point of view of coffers, it costs time only; I find it pretty bad concept, to be honest.

I think upgrading fleet should be feasible strategic/economic choice (as well as honoring veteran crews with new tools, instead of sacking poor old warriors and hiring new recruits instead...).

I understand that due to ability to upgrade ships on the fly, hundreds parsecs away from home somewhere in deep space, it should be costly (and it should remain as it is), but how about seriously lowering the costs when ships are stationed in your shipyard?

It is not emergency retrofitting, should take some time, need either credits or military production in form of cluttering shipyard queue (or both) and cost roughly as much, as the production costs difference between the two designs, plus maybe some small flat cost depending on hull size (but much, much less than insane costs now, while upgrading anywhere in space).

This way upgrades could be actual choice, when you are ready to sacrifice some production time and some credits (some, not all...) which would make some freaks like me happy  (I can see that there are a lot of upgrade lovers out there), while in the same time emergency upgrading in space would cost plenty, as it costs now, so it will present completely different strategic choice between sending new ship from the distant homeworld to the frontier and having extremely expensive and relatively fast upgrade right where it is needed.

Any thoughts on that? Any dangers for balance?

(I would also appreciate if someone could point me to the file when it would be possible to mod this for my single games, i.e. at least reducing upgrade costs while in shipyard, if adding upgrade to shipyard production queue is too complicated)

This one is interesting, feeling irritated that upgrading ships in enemy territory is not realistic and too expensive. How about the fact that the ship is upgrading itself without the use of a shipyard? If we want realism then yes bring the cost down from building a brand new ship but make it mandatory to bring the ship back to a shipyard There should be special requirements for shipyards too, a constructor ship sent deep into enemy territory building a starbase in one turn should not be it, realism is a lofty goal but it would come at a price.