ELI5: What is "upscaling" and how does it differ from simply stretching a lower resolution?

I hear a lot about how consoles, when they cant handle 1080p, "upscale" a lower resolution to 1080. Now help me understand, is there something actually happening that makes the lower resolution image look decent on a higher res display? Or is upscaling a fancy name for just making the image fit the screen? For example, lets say an xbox one is running Battlefield 4 at 720p "upscaled", and I have a PC with 1280x720 set in the video options, both are running on 1920x1080 displays; will the xbone one somehow look better, other graphics settings like model quality and texture resolution aside? Sometimes I plug my 1360x768 TV into my PC through hdmi and play games on it, and when selecting the 1280x720 option in the games video settings, the picture looks very different (games seem to look very crisp even more so than when running the tv at native res) and the TV will say it is running "720p", while its native resolution simply says its running "1360x768." Is this an example of upscaling?

Submitted by LizardWafflez Xbox 720 Release Date 2015