Do you have to have the house upgrade to get married?
No, you don't have to upgrade your house to get married, but you have to buy a big bed.

Here's the link for the marriage basics: http://fogu.com/hm10/marriage.php
And don't forget that you need to watch all his flower events, too, in order to marry himThe Big Bed needs to be in your house so that your spouse has somewhere to sleep. You do not need to remodel your house in order to get married. Once you reach year 2 in the game, check the message board in the town you are living in for the Bed Build request from Eileen. She will post it once you are at Request Level 3 and Eileen has over 7750 FP. To complete the quest, bring her 2 Ore Stones and 30,000 G to get a larger bed for your house.
Here's the link for the marriage basics: http://fogu.com/hm10/marriage.php