Linda S, I would prefer the Island Princess for one reason: the Horizon Court is up high and all the way forward instead of aft like Diamond Princess and the views are spectacular. The views are actually spectacular from anywhere--but it can be very cold, especially in Glacier Bay or Tracy Arm--anywhere there are glaciers; and it is so nice to relax in the comfort of the Horizon Court and soak in the scenery.
In my opinion there is not one whit of difference between July and August; wildlife sightings, like the weather, are completely unpredictable and capricious. Go when it best suits your schedule.
Upper decks would be better for wildlife viewing; your field of view is wider and it's easier to get from side to side when sightings are made.