Yes, a Blu-ray player will upscale your DVDs to the resolution you tell it to. Will it do it well? Well, that depends on how good the upscaler is.
Upscaling is a tricky business because it has to convert a low resolution signal to a high resolution signal - 576i (PAL DVD) to 1080p (Full HD) is roughly a quadrupling of the pixels. Different Blu-Ray players have different upscalers. And different people like the output of different upscalers.
The only real way to test is to get the hardware demo'd. Get along to a hi-fi store somewhere, take your Panasonic upscaler with you, and a selection of your favourite DVDs. Play them on a 1080p screen and see what combination of sources you like.