Hm, wooden walls - not fences - are upgradeable. Just select the Manage Walls icon on the bottom right of the screen, highlight the part you want to upgrade and confirm.
Well, fences serve a different purpose to walls. Fences are to keep deer out of crop fields, cows from wandering too far while walls are meant to protect your town from predators and raiders.
You can upgrade from a small stone fence → wooden palisade → stone wall.
So why not bring the wooden fence into it?
Additionally the upgrading costs more material. If you have a small stone fence and you upgrade it to a wooden palisade you have to bring in wood for the upgrade. You don’t get the stone back. If you demolish the stone fence and then build the wooden palisade, you need the same amount of wood but you get your stone back.
Same with the upgrade from wooden palisade to stone fortification. You don’t need wood for the stone fortification if you build it from scratch. But you don’t get the wood from the wooden palisade back if you upgrade to stone fortification. You get wood back if you demolish and build new. Stone cost are the same for upgrade or new build.