The card upgrade system is an important aspect of the game. It allows buildings to become more efficient - allowing better coin storage and more Peeps at the same time - along with giving you a lot of Experience Points, which lets you level up more quickly and unlock even more cards.
Upgrading a card also adds to the number of copies of that same item you can place in your park. The exception to this is coasters - you can only place one of each coaster type in your park.
Any upgrade requires an amount of Coins and some cards. Each rarity has a different amount of Coins and cards required, and gives a different amount of experience. The rarest cards have fewer upgrade levels than the most commons.