Configuration IS typically called customization in SAP. "The Customizing" is SAP speech for the sum of all configuration settings and it IS DEFINED THAT WAY IN THE OFFICIAL DOCUMENTATION, even in the english version (the difference is more blatant in the german version, as "customizen" and "customizing" are not german words, but still used in the german docs to specifically refer to the configuration section of SAP)
https://help.sap.com/viewer/521cd184dd2f491a9a4179edb66951c3...
Let me quote:
"The term Customizing refers to the process of system configuration during which the members of the project teams make the required system settings. In the SAP System, Customizing activities are performed through the Implementation Guide (IMG)."
And no, this leaves no room for interpretation. The IMG is basically the centralized config setting catalogue of SAP and does not allow programming.
It may not be, what is typically meant with customization or with other systems, but in SAP "customization" refers by definition to anything which can be configured WITHOUT programming.
All documents clearly differentiate between "customizing" = using the configuration, "extending/programming/development" which would be Z-reports etc., "enhancement" with user exits, BADIs and the like and "modifying", which would be patching the standard programs.
And yes, of course upgrades still require testing. But saying it is "impossible" to upgrade just because you have z-reports and the like is plain wrong. Most of the time, especially if we do not speak about a full blown ECC to S4 migration, which involves large scale changes to the underlying database structure of the ERP unlike upgrades within the ECC line itself, you will not require updates to your z reports at all.