I think it's a trade off and hard to judge finitely. Upgrading planets gives increased credit and hydro storage, and increases the values of the shipments. Bear in mind that different planets do different things, explained by the magnifying glass. Some produce hydro, some credits, etc. On the downside, it'll still be limited in the overall number of shipments.
Colonizing a new planet gives all of that as well, but at increased initial cost for the colonization and upgrading. Also keep in mind the hydro cost used to transport back and forth to that new planet. However, it will give you another planet making shipments and will eventually provide for the additional storage and all.
Just for illustration, take a look at my system - I'm relatively advanced thanks to a week of vacation and some free time, and I have yet to colonize the sixth planet. It's on my list but I think I'd rather have some tech first. Hydro is definitely the limiting factor at this point.
tl;dr - you have to weigh the benefits of upgrading a planet and the limited benefits versus colonizing and the hydro drain that goes with transporting to and from and it's long term benefits. I'd say if you're still left wanting for hydro at some points, and you're at five planets, stay there.