As to 10 dbs in one instance, that should be no problem. I have ~1000 dbs in a dev/qa instance at our site!
SQL will automatically upgrade the db, you don't have any choices to make there. You're not allowed to choose anything different for updating the internal structures of the dbs.
Before you do that, check the databases, any larger databases or heavily used ones should go into their own instance. If you're throwing everything into the same instance make sure you split out the memory allocation correctly.
Realistically, you have 10 databases, I'd check each of those first to find the compatibility and then decide if you can move them over.
There is a wizard that will allow you to select specific options for what happens to the database on import. I'd discuss the best option with the suppliers of the 10 databases and then go with what they recommend.