[color:"orange"]I'd rather see a fire bolt grow into a flaming inferno over 20 skill levels (some perhaps from augmenting passive skills) than have to dump the fire bolt in favour of a fire ball, then a flaming inferno. Any spell can potentially be the most powerful spell.[/color]

In this case, it would be nice if you were still able to cast the lower level spell even after it gets upgraded, to conserve mana fighting weaker opponents. This could be done by putting skill points into a category (ie Fire) to activate each spell at the appropriate level.

More flexible, and more original, would be to do a straight upgrade of the spell, but to allow it to be cast at partial strength (which could also shorten the casting time). Perhaps casting a spell at higher than full strength could do more damage, but also do physical damage to the caster, and add a time penalty before mana would start regenerating (or another spell could be cast). Depending on the proficiency with that particular spell (perhaps based on the number of times it has been cast), the higher a mage tries to overreach their skill level the higher the chance the spell will misfire (doing damage to the caster, but not the enemy).