Hello! I have already posted somewhere my own take of this topic, but I suppose you'd find it too gritty and too costly for the game you are playing.
Nevertheless, I usually assume that cyberware surgery inflicts one box of damage for each .1 of essence cost. Then I calculate healing costs to set the recovery/relearning time after the intervention. In our game the house rules are that the base time for healing damage is (boxes) days, because we like shadowrunners lying in their beds for longer.
And of course you do not explode in a fine red mist if you install wired reflexes, people just don't die in elective surgery in 2070, it just takes more time-
Regarding how obvious or not cyberware is, it just depends on the different pieces. Wired Reflexes are obvious if on all the time, cybereyes can be obvious or not, depending on tastes, but will not withstand close eye examination, dermal plating is obvious -says so in the RAW- smuggler compartments are not, cyberguns have their own perception rolls, cyberears are usually unnoticed, unless you have your auricles replaced for something funkier, etc, etc. Common sense and making the calls explicit to everyone beforehand goes a long way towards coherence and gaming satisfaction.
Oh, and the upgrades are working just fine, I have players pay for the difference in costs plus hospitalization and that's it. Runners are getting upgrades quite frequently, but then, I also have Johnsons pay more than the suggested amounts for runs. My gaming group clocks around 75 karma average and charge something around 3500-5000 nuyen per run, usually one or two runs a month, plus medium lifestyles. They started low, and worked for a third of the amount, but now they're getting professional.
Hope my two

contribute something useful
Cheers,
Max
BTW: how's da barren story going?