What do the Pokéball upgrades do?
According to Bulbapedia, it multiplies the points you score:
Fittingly with the other Pokémon-inspired tweaks to the basic pinball formula, the ball is a Poké Ball. Each table has three lights near the top of the upper half that, when lit simultaneously, will upgrade the Poké Ball temporarily to the next better basic Poké Ball; the upgrades are the Great Ball, the Ultra Ball, and the Master Ball. Each upgrade multiplies the points gained on the table by a different multiplier: 2×, 3×, and 4×, respectively.