Does audio upsampling create noise/artifacts or degrade the signal?
The up-sampling process will always change the signal in some measurable way. However, if it's done properly the changes are negligible and don't result it any audible difference. Most commercially sample rate converters (hardware or software implementations), do a really good job at this.

Off course, if done badly, upsampling can result in clearly audible signal degradation. I'm not familiar with Apple's implementation but I would assume that they got this correctly.