Doivid said
Yes you can upgrade without resetting, but generally only new chunks will have the new stuff.I'm not really into the faction idea, I wasn't too enthusiastic about implementing it to begin with.Also I'd kinda prefer not to reset, personally. But if it'll make it easier for people to access new stuff then I understand.
If new chunks will only have the new stuff, then you will have to venture way further out to get it which will take up more memory on the server. Besides, you can get much of what you have again fairly quickly.