In the commercial red phosphor industry, Eu3+ doped Y2O3 phosphor has garnered the attention of researchers over four decades, advancing through nanotechnology and materials engineering. The authors here tried to advance the existing phosphor luminescence properties by introducing metal Ag nanoparticles (NPs) for their well-known surface plasmon resonance (SPR) based enhancements. In the course, Eu3+: Y2O3 phosphors have been co-doped with Yb3+ ions, and upconversion/downshifting (UC/DS) photoluminescence (PL) optimizations were done. Moreover, Ag-NP incorporation with different concentrations was studied through x-ray diffraction, Raman, transmission electron microscopy, UV-Vis absorption, UC/DS PL, and decay lifetime through characterizations. The emission of 610 nm (red) is well defined in both dual mode UC/DS PL spectra, which is conventional for the Eu3+:Y2O3 phosphor. While we expected metal Ag-NPs to show a better emission yield when excited with 980 and 395 nm excitations, the results only supported NIR upconverted emissions. However, DS emission does not show any SPR related enhancements. These results of UC emission enhancement over DS of Ag-incorporations were explained using rate equation modeling and justified by plasmon cloud assisted mechanisms. A quantitative evaluation of the Ag+/Ag-0 ratio in the Ag3d spectrum as a function of doping concentration reveals that at higher doping concentrations, metallic Ag-0 becomes dominant, which correlates with the quenching efficiency and enhancement of nonradiative emission from the Eu3+ ion. The solutions of the rate equation modeling and experimental decay lifetime gave a satisfactory explanation for why the DS process shows failure in the emission increase. The results indicate that the Yb to Eu transfer probability is much higher in the UC mechanism, while the DS process, which involves 395 nm absorption for population inversion and is in closer proximity to Ag SPR absorption, i.e., 480-500 nm, has a lower de-excitation probability from a higher excited level (L-5(6)) of europium to the red emitting (D-5(0)) level.