Let's say I have a kobold warrior 1 and I want to advance him to warrior 2. Kobold warriors have a base CR of 1/4. Does the advanced kobold warrior 2 now have a CR of 1/3? Or would it jump to 1/2, or possibly 1? I am having difficulty finding solid rules on this.
That's because the rules for working out CR aren't solid. They'll frequently give you the wrong answer, especially when you are freeforming. There are lots of choices you can make, deliberately or accidently, that will give you the wrong answers - too high or too low. I recommend 'eyeballing' both CR and EL as needed, especially with humanoids.
So that would seem to indicate that for every 2 levels in an NPC class, the monster CR increases by 1.
That's a pretty good rule of thumb. I'd note however that for commoner, it closer to CR +1/4 levels.
As far as CR below 1 goes, it's mostly do to racial traits. The difference between CR 1/4, CR 1/3, and CR 1/2 is very minor. For example, the difference between CR 1/4 and CR 1/3 seems to be about 1 hit point and a fraction of a point of potential damage per round. The more levels and advantages you add to the creature, the less important its racial diffences are going to be and the less I'd pay attention to them.
So for example, for warrior 3, that would normally work out to about CR 1 1/2. For an orc, I'd probably round up to CR 2. For a kobold or goblin, I'd probably round down to CR 1. For a warrior 5, that would normally work out to about CR 2 1/2. Again, I'd probably round down for a kobold to CR 2, and up for an orc to CR 3. How well does that work out? Well, a Dire Wolf is CR 3 and I can see an Orc warrior 5 with slightly superior weapons and armor as suits his station (chain instead of studded leather, for example) as being about as capable of a foe. A goblin or kobold warrior 5 is closer in power to the CR 2 worg, so I think that works pretty well too.
For PC classes, I tend to assume CR = level - 1, and drop the CR by one increment if the NPC doesn't have an elite stat array and by another 0-2 increments if it doesn't meet the expected wealth by level table for NPC's depending on the level the NPC. I don't usually consider race in the calculation. So I'd generally put an orc, goblin, or kobold rogue 4 all at about CR 2. The slight differences in racial abilities just don't amount to much compare to the capabilities you get from 4 levels of a PC class. Once we are talking CR 2 or CR 4, plus or minus 2 or 3 hit points just isn't enough to make a difference unless you want to start tracking fractional CR.
And I should say that in general, your NPC's SHOULDN'T usually have the expected wealth by level for NPC's. This is a terrible trap if you try to follow it. Not only will it make NPC's fantastically difficult to design, but if you plan to make most of your villains human (as is common in many human centric campaigns), you'll end up dumping way too much treasure and resources on the players. The game tries to get around this by giving the villains lots of one shot consumable resources, but that doesn't always work well.
Another peice of advice I can give you is that contrary to the EL rules, EL doesn't go up by +2 for each doubling of the number of monsters if the monsters are of low CR relative to the party. For a 6th level party, if 2 orcs are CR 1, 8 orcs are probably not CR 5. The problem with this assumption is two-fold. First, it ignores how vunerable monsters with low CR relative to party level are to area of effect attacks. If the entire force can be wiped out by a fireball, that probably didn't consume 25% of party resources. Secondly, it ignores the effects high AC relative to attack bonus has on expected damage. Let's say a monster needs a 15 to hit you and does an average of 6 damage, and so it hits about 1 round in 4 and generates 1.5 damage/round. Facing a higher level foe though with better defences, if it needs a 19 to hit now its hitting just 1 round in 10 and generating just .6 damage/round. And if it needs a 20 to hit then its hitting 1 round in 20 and dealing just .3 damage/round. If you compare 8 orcs to something like a CR 5 dire lion, it's pretty darn clear which foe is expected to do the greater amount of damage to a 6th level party. And orcs, like most brutes are fairly resiliant here because their 17 str gives them some staying power. Something like a Gnoll is fearsome at low level but quickly becomes trivial unless you work to keep it relevant. For that reason, I tend to lower the computed EL for large groups of relatively weak foes. If I wanted a CR 5 challenge in 1st level warrior orcs for a 6th level party, I'd bump the numbers up to about 32 - EL 9 by the rules and supposedly threatening a TPK but probably pretty trivial for most 6th level parties. That isn't a guess. This is based on experience. A 6th level fighter or other combatant will wade through orcs 2-3 orcs per round while taking minimal damage. A 6th level Wizard will one shot most of the orcs with a single fireball, and will negate massed missile fire with a single protection from missiles spell. The party cleric will negate any minor damage taken with 1-2 low level cures.
This has basicly been true since the 1st edition era. One of the first programs I ever wrote as a kid was a simulator to answer the question, "How many X can a fighter of level Y be expected to defeat single handedly." For 10th level 1e fighters, the answer for kobolds and goblins was in the high hundreds. Even for orcs I think the answer was around 300 or so. (I don't remember the exact numbers but they were really high, and the answer sometimes varied dramaticly depending on whether the fighter could put his back to a wall or stand in a doorway. In fact, they were so high that something the simulator didn't take into account would have been the overwhelming feature of any static combat - eventually the bodies would be form such a massive wall about the fighter that normal combat probably couldn't continue.) And that was one character. It didn't address the issue of "I cast cloudkill" or similar "I win" magic buttons.
