You can use i Tunes Match to upgrade the low-bit-rate tracks in your library to 256kbps AAC files.
After and letting it back up your library, all you need to do is create a Smart Playlist to round up all the songs in your library with bit rates less than 256kbps, take the leap of faith of deleting those files, and then use i Tunes Match to download 256kbps versions of the songs you just deleted.
Make sure you leave the box unchecked (unchecked, underline "un") next to "Also delete these songs from i Cloud." (You want to leave copies in Apple's cloud, which you'll download in the next step.) If you want to run a quick test before taking this leap of faith, just highlight a couple tracks or an album's worth of tracks and try this step with a smaller group of files first. Or copies of your files stored in the cloud via i Tunes Match, that is.
Right after i Tunes deletes your files, you'll see 256kbps copies in their place, and each file will have the little cloud icon next to it, showing it's stored in the cloud and ready for download.
You should update your i Tunes to be the latest and then follow the below steps to fix this i Tunes library disappearing problem.