I would like to start my response by stating some facts. Lords and Ladies, I remind you that Stormfall is a free-to play game.
In the free-to-play model certain features within the game must have a cost value because developers must make profit to keep the game running and growing.
At the same we have made it possible for the players to earn their way up and unlock features at a slower pace for free. It may be time consuming but it is a perfectly viable way to play the game. If you feel like paying for your progress, the game is not stopping you, if you don't believe in paying for a free-to-play game, don't pay. We are not going to make apologetic statements for making some aspects of the game available for real world money.
Now, to the questions:
Can we get a sneak peak at how it looks at lvl 20?
No, unfortunately. Your league will need to upgrade the fortress or to find a 20 level fortress on the map to see how it looks.
So at what level will league members have an active Upgrade button?
Anyone with a permission from the League Marshal can upgrade the Fortress.
So the fortresses do not have any defense bonus themselves?
No, they don't have defense bonuses. Use your units only to defend them.
Where do I go to see the strength of defense at the fortress?
The Garrisons tab shows all the Units stationed in your Fortress.
Once the fortress reaches milestone (5) or (8) and they stop there, it can't be downgraded, right?
Yes, that is correct. It's for you to decide what to do with the fortress and whether to keep your units there or not. But keep in mind that a fully upgraded fortress provides much more bigger bonuses than low level one.