I am not understanding your dilemma. In the first sentence you say you will be buying a home. Then you say it would be cheaper to have your home built than to buy a home. Then you ask about upgrades.
Are you asking about upgrades you will be doing on a home you buy? Or are you asking about an upgrade package that is available from the builder of a new home?

I'm in the real estate and design biz. What specifically are you calling upgrades? Upgrades are usually bumping up in quality- like getting a better quality carpet or countertop than the norm.
You may be referring to improvements that actually add to the value of the home.(?)
You may also be simply asking what you can do during the building process to keep the cost down on your own (?)
I'm building a house soon and I'll be the general contractor myself which saves 10-20% of the cost.
During the building process I will be doing the drop-down wiring part of the electrical and having an electrician tie it all in, doing the insulation, drywall clean-up, painting, some of the flooring, and built-ins. I can do a bit more but I want the pros to do it.
I'm still not entirely sure what you mean by what upgrades are a must-
Please be specific and I will try to help all I can.

Typical upgrades when building a home are things like hard wood floors, crown molding, 42 inch cabinets, granite countertops, etc. Which upgrades are worth doing through the builder at the upcharge? Which upgrades should we pass on and put in ourselves at a lower cost?

This can be a bit tricky because you don't want to have the builder install carpet where you may want hardwood floors and most builders will want total control of the subcontractors and materials they use, and usually charge twice the actual cost of materials.
If you take out a loan to build there are usually provisions by the county and lender that state that the house has to be 95% complete ( at least) for owner occupancy.
Having said all of that- if it were me, I would have the builder give me a cost credit for what they normally put in and then allow me to have my own contractor do the hardwood floors, for example, and pay for the materials out of pocket or have the lender approve it like a construction loan.
If you're not using a tract builder or chain builder ( so to speak) it shouldn't be an issue- if not, just make sure you tell them the details and write it all into the contract, even if you have to do a cost sheet for their side of things and attach it to the contract.

OK- so if it were me, I would basically have them put in the things you can't like the 42" cabinets and what is needed to get the house to a basic finish-out and I would add things myself like trim out, crown molding, ceiling fans, lighting, flooring, paint, and anything else you can do or want to learn how to do. It wasn't hard for me to do the crown molding and oversized baseboards, lay flooring and shower tile, paint, etc.
Maybe if the builder will credit the things you don't want like carpet, they can apply that difference to the upgrades they do ( it's what they should do but may not do unless you ask for it). Hope that helps.

Personally I would keep costs down on what you do yourself and order yourself and add to value by doing functional things that add to value like make a powder bath into a full bath- hard improvements that add real value over time.

If I were ever getting a house built, and I suppose it must depend on the floorplan, but I so wish my long hallway in my house was 3' wider and had bookcases down one wall with spotlights pointing down all the way. I would have gladly given up 2-3' of the two bedrooms on that side of the wall to accommodate shelving in the hall. Also, be sure to get a pantry...can't live without mine. Also, insist on a large linen closet...mine is dinky and all my down comforters have to go in rollaway boxes under the bed in the summer....SIGH!