Update for others' use.
Apparently when I disassembled to clean the valve body, I got the springs for the 1-2 shift valve and the switch valve mixed up. They are the same diameter but vary greatly in spring rate. The switch valve spring is much stiffer. This was preventing a 1-2 upshift.
In a 46RE valve body, here's what happens to effect a 1-2 upshift. One side of the shift valve (the side with the spring) is exposed to throttle pressure. The other side of the valve has the 1-2 governor plug on it and is exposed to governor pressure. Remember that in a [gas] 46RE, governor pressure is approximately 1:1 with vehicle speed, i.e. 10 MPH = 10PSI, 20 MPH = 20PSI, etc. When governor pressure provides enough force to overcome the combination of thottle pressure and the 1-2 shift valve spring, the 1-2 shift occurs. Since I accidentally had a much stiffer spring in there, governor pressure was unable to overcome the two, even at 50 MPH. Switching the springs cured the problem. And for those of you wondering, I couldn't effect a 1-3 shift by letting off because line pressure is not fed to the 2-3 shift valve until the 1-2 shift valve has stroked. No 1-2 shift means no 1-3 shift, in this case.
One thing to keep in mind is probably something that doesn't need to be said, but I'll say it anyways. When you are disassembling/cleaning/reassembling your valve body, MAKE SURE YOU KEEP TRACK OF WHERE ALL YOUR SPRINGS GO!!!
Believe it or not, there is not a lot of good information on spring location for these valve bodies. The FSM does a good job of showing where all the valves and plugs go and it is usually pretty easy to identify where each valve goes because there are pictures. But they don't say anything about the springs. Same goes for the instructions in a shift kit. They only call out spring color/# coils/coil diameter on springs that the shift kit replaces. Every other spring, they tell you to just leave it alone. So keep them straight!
Lastly, the 1-2 governor valve gets replaced as part of the TransGo TFOD-HD2 shift kit. Also, if you have wear on either of the two valves, an upgrade kit is available from Sonnax (part number 22771-14K) that replaces both valves with upgraded valves that have a teflon seal. http://www.sonnax.com/product-lines/...ion/parts/2416