1. Copy the ENTIRE site folder, not just USER.ISM.

2. You can copy the ..\USER\*.ISM files, but the references inside of them to the old server will not be "converted", they'll have to be changed to the new server path.

1.  I copied the entire site folder - but it attempted to upgrade the current production system. I assume the issue is because I made the copy after the install of 2018 on the new app server - so it copied over the orgs.ism done during setup to the new apps server and new DB server.  I recreate the company in dbsetup and note ONLY the orgs.ism is updated.  If I copy the whole directory is there any other .ism file I need to concern myself about

2.  when you say the old server will not be converted and have to change the new server path - what do you mean?  IN your experience do you copy the \user directories?

1. You didn't say you had different versions of the programs running, you said you were "doing an upgrade". 

2. I'm just saying that custom shortcuts inside user desktops that reference a UNC path will have to be fixed on the new server.