Cannot set Airport Extreme to Extend Network

Hi all,
So I have a Time Capsule 2013 downstairs as my main base station, two other Expresses downstairs set to extend the network, and one Airport Extreme upstairs which I can't set to extend the network. During the setup in Airport Utility, it allows me to select "Extend Network (Recommended)" and the Time Capsule as the main base station that it would be extending. But when I check it in Airport Utility after it's set up, it shows it set to "Create a Wireless Network"
I have ethernet connected to the upstairs Extreme via a wall drop going straight to my FIOS router in a distribution panel. My main Time Capsule is also ethernet connected the same way going to the FIOS router.
So my question is... is the Extreme upstairs changing back to "Create a Wireless Network" because it is ethernet connected, unlike my two Express units downstairs? And secondly, is this the preferred method to set up my network? (basically, a Time Capsule and Airport Extreme each connected to a LAN port on my FIOS router, plus two Express units on wireless.). I've read where the optimal way is to interconnect the Airport devices over ethernet, but my distances are too great to do that.
Any feedback or advise would be much appreciated.
Thanks

is the Extreme upstairs changing back to "Create a Wireless Network" because it is ethernet connected
Yes. This is the correct setting.
It can be confusing, but when you "extend" using an Ethernet connection, the AirPort will use the "Create a wireless network" setting.
When you "extend" wirelessly, the AirPort will use the "Extend a wireless network" setting.
If you try to connect using Ethernet, and use the "Extend a wireless network" setting, the "extended" network will crash.
is this the preferred method to set up my network?
A wired Ethernet connection is always preferred over a wireless connection when you are extending the network. The main reason for this is that there is no bandwidth loss in a wire.
When you "extend" wirelessly, the extending device can only extend or repeat the bandwidth that it receives. By the time that the wireless signal reaches the extending device, it has slowed down considerably. So, a slower signal gets repeated.

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Thanks Tesserax,
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Option 1 from your suggested solutions is not a goer because the modem and Airport Extreme are in different parts of the house making it impractical to run a cable between the two devices.
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Cannot set Airport Extreme to Extend Network

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