The advantage with stone houses is that they use much less firewood (think it's only 50%), but the disadvantage is obviously the high cost (and IMO, worse look). If you do want to upgrade, especially many at once, it's good to have a boarding house or two already set up, so the inhabitants will move in there while the old house is emptied, torn down and rebuilt.
Another advantage to the upgrade process is that you can split up families, which can be good if you are a little short on houses. From what I can gather, if you have many families in a boarding house (or without a house), a younger couple will move into the new house, and therefore start procreating. Before, they could have still lived with their parents, and therefore not be able to have kids. When I mass-upgraded my wood houses over several years in my 400+ population village, this meant a boom in new children, which was quite a nice thing to see.
Make sure you have the resources, though, because it's quite intensive in stone and iron. Woodhouses cost 24 resources combined, while stone houses cost 74, so it's not a small difference. Unless you're struggling to keep up with firewood supply, it's probably not worth it.