Well, I know you can copy and update the design and refit, but once or twice I was actually able to modify the design of a ship I had already struck a few of (I think I added another weapon mount) and upon ordering it to refit, did all that you have described. Under most conditions though, I can't modify the components of a ship once it's been fitted to a yard, so I was wondering if there were any weird rules or ways you could do such a thing, or if I just got a lucky bug

Also, 5-7 years? My maintenance schedules are usually more like 2-4

If this is the first time u play i suppose u followed the tutorial istruction.
When u create the first ships through the 'fast OB creation' screen they get created without locking the design, meaning u can change it and the changes will reflect on the already created ships. This is anyway a bug (i suppose).
When u later on create the ships the common way once u start the retooling of a shipyard the design get automatically locked, meaning u can't change it anymore. If u want to upgrade it u need to make a new design (usually by copying the previous version).

For maintenance the time u wait until overhaul is all up to you. Kepp in mind that overhaul remove 3 month from the clock for every month of overhaul, meaning that the process will require 1/3 of the time showed by the clock, with the result that bigger clock mean longer overhaul.
If u don't need your military ship for something is better keep them in a colony with enough maintenace facility to prevent the clock from ticking.

Granted - I realised that I slightly misinterpreted what you wrote (its been a long day, His Imperial Majesty (3)  & Her Excellent Royalty (1) are running me a wee bit ragged!)

If you do that then the overhaul & the refit (or repair)  happen in parrallel (not one after the other).  In effect you get 2 (or 3) sets of clock wind back at the same time (until the refit/repair completes).  This is because the overhaul winds back the clock steadily as time passes, while the refit looks at how much time was taken at the end of the process, and then reduces the clock in one big jump there. 

Note that you CANT start a refit (or repair) and then start an overhaul, as you can't issue an overhaul movement order if there are outstanging shipyard tasks associated with the TG (OK I suppose you could move the ship to another fleet and start the overhaul from there, but you get my point).  Some people might look on it as a bit of an exploit, but you're paying cash & resources for all the processes - the only benefit is saved time which I see as fair enough.

Now changing a ship design by "Refit" does mean a overhaul needs to take place first, after that is complete it will then refit the ship.

This is not actually true - you can refit a ship regardless of its overhaul status, and in fact while it is being refitted it also gets the benefit of being overhauled (ie its maintenence clock is reduced in proportion to how long it took to refit).  If the ship was also being overhauled at the same time, then the end of the refit will also end the overhaul (even if the maint clock is still >0). 

It is even possible to have a ship being refitted, overhauled & repaired all at the same time - it will take up capacity in two shipyard slips (the refit has to be carried out in a yard capable of building the class that your are refitting to,  the repair can take up a slip in any yard thats big enough - not that these DO NOT have to be the same shipyard - I currently have an explorer refitting to new engines (in a 1Kt corvette yard) while at the same time the Grav Sensor is being repaired in the unassigned 32Kt battleship yard (its waiting for a large sensor array to finish development in a month or so before I start retooling the Shipyard)

Note that a refit will NOT repair damaged systems - you have to do this seperately.

Could someone explain to me the conditions needed to overhaul a ship? There have been cases where I discovered a new tech and upgraded a system, and can simply hit up Design View and drop the new tech in and overhaul the ships, while other times, I can't modify the ship in any way.  Is there an easy way to modify ships? And what am I missing?