I have achieved a working install of Moodle 3.2.1 on 1and1 hosting.
- Install Moodle via the 1and1 one clickandbuild system. This installs Moodle 3.1 into the folder /clickandbuilds/Moodle/mymoodle
- Copy the config.php file.
- delete the contents of /clickandbuilds/Moodle/mymoodle EXCEPT for the /clickandbuilds/Moodle/data folder
- Upload Moodle 3.2.1 to the folder /clickandbuilds/Moodle/mymoodle
- Put your config.php back.
- Visit the website to complete the upgrade.
Main issue I have is that it puts the moodledata folder inside the website as /data/. I also moved this out and edited config.php to suit this change.
I hope this helps and makes sense.