Haven't spent any donuts. I've just been playing every two hours or less. I'm on vacation.
And I've had enough elixir to keep updating the castles as needed until I got to 10 at each one. Im waiting to see if the tasks ask me to upgrade further.
As far as upgrading the characters it just seems like a joke, as that's what the dialogue insinuated. Upgrades for sale of upgrades. As long as you have the gold you can upgrade, it doesn't take any away. Doesn't seem to unlock any character features either.
I've liked the update as it's always had a lot to do, but it is quite silly that not all of the prizes have been actual gifts. The hot air balloon requires donuts to buy. 55 donuts is a discount for something that gives 2% more money and xp, but I'm not sure that I'll buy it.