Upgrading should preserve your current entries without problem. As with all upgrades for any module, we recommend backing up the website's files and database beforehand, just in case.
There is not any way (that I am aware of) to export the locations to Excel from within the module. If you can point me to the forum post that mentions this feature, I'll try to figure out what they're referring to. If you have access to your database, you should be able to directly export that databse table to Excel. In general, we would recommend keeping regular backups of the database which would, of course, include a backup of the locations themselves.
In terms of managing large lists of locations, we recommend using the interface built into the module, or keeping a CSV file that you update and then re-import when you have changes. If the upgrade does not help with managing locations, I would appreciate it if you could let us know what the pain points are for you in editing locations, so that we can try to address those going forward. We certainly don't think that it is ideal to have to go outside of the module to manage its content. You can either respond with those suggestions here on the forums, or you can add feature and enhancement requests to our issue tracking site.
Hope that helps,