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I got the guns and the heavy armor, does the med bay upgrade serve any purpose besides healing your scars?
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Okay, spoiler version:
The more ship upgrades, the more surviving team members at the end of the game. I don't know what the exact connections are, but the Guns are probably Grunt and the Heavy armor could be...also grunt. The engine is probably Tali. The sick bay is the magical singing alien doctor man.
Non spoiler: It influences certain aspects of later parts of the game and
can help in the last mission, I'm not positive about the latter though.