You upset something when you disturb it. You can upset your stomach by eating bad food, or you can upset a pile of something by knocking it over.
But when most people say upset they mean to disturb someone's emotions, which often makes them sad and agitated. The child in the picture is upset.
You are upside-down when your head is lower than your feet. You can go upside-down hanging from play equipment like monkey bars, or if an adult holds you up by your feet. The world looks different when you are upside-down.
When you turn anything else the wrong way up you say it is upside-down. Cats often lie upside-down with their legs in the air.