Just to clarify, the master clips are replacing fine, but the subclips I've made are remaining at 720p, and those are what are placed in the timeline and have the Effects applied to them, so the video remains at 720p. What I want to do is replace all of the footage from 720 to 1080, but retain the clips, order, and effects I've added so I can export the same video at 1080.
Copy the edits in your 720p sequence, and paste into a 1080p sequence... then replace the footage.
Is there a way to do what I'm trying to do?
There are two methods vastly superior to the one you're using now.
First, edit in 1080 and just render if you need to see a realtime preview.
Second, edit in 1080 and get better hardware to handle this stuff.
(Personally, I think option 1 is your best bet.)