You can also do the Everest Challenge as a cat 5: 100 miles and 15,000' of climbing on the first day, 75 and 14,000 on the second, same as all the other fields. In fact cat 5 is often the largest field, because many of the riders only do a few races a year. I did it as my first race when I came back as a 5. (I didn't bother to petition to my previous category because it was only cat 4 and I figured that after 15 years off I could use some practice and instruction, and many NorCal races have Master 45s 4/5 fields so I'd be in the same field anyhow)
The point of cat 5 is to have smaller safer fields for beginning racers and allow the beginning racers to learn a bit about racing safely before they are unleashed into 100-strong cat 4 fields containing aggressive and experienced riders. I started racing in the 80s before cat 5. Back then cat 4 was a crash-fest. You had brand new riders mixed up with guys who'd been racing for a couple years, and riders who still thought that they could be the next Greg Lemond if they took enough chances. It's safer now- the 4s are still the same but keeping guys who have never raced out of the mix makes it more predictable.
There is no mandatory upgrade from 5 to 4. You have to ask for it. If you're not comfortable mixing it up in the larger cat 4 fields then stay a 5 for a while.