What extra features does the iOS YouTube application have over the HTML one?
I use YouTube for the simplest case - watching movies that have been sent to me. I don't do much posting or browsing.

To my knowledge, the iOS YouTube app hasn't seen a lot of changes since the 1.0.

I think the biggest "feature" of the native app is the improved responsiveness. I've found the webapp to be slower doing things like full screen or changing screen orientation, and in the initial loading speed. However I wasn't aware of the decreased quality. I think it should however load the higher bitrate videos when you're on Wifi.

As for uploading, on iOS that's usually handled by the app that's recording/editing the video.