@Wendy268
It's clear from your listing that the maximum occupancy is one person.
Time to tell the guest he has given himself a problem as he has made a mistake.
After chuckling at his request for an upgrade and explaining you are not a hotel, give him your suggestions.
Either one of them should try to book somewhere else local - unlikely as they are together.
So the likely one is that he is best to cancel the booking and find somewhere appropriate to his circumstances.
You have a strict cancellation policy so he is going to lose out financially , you may suggest that if he does cancel - and you manage to fill any nights you could give a goodwill refund without loss to you.