Those upgrades can be done at the small Dragon Statues that are scattered around the world. Given you have done the assosiated quest that unlocked the feature.
There is one in the western part of town for exsample.
Viewing post in Field Effects and one new Bad Ending added comments
Sorry, seems like I misunderstand!
Nope only indirectly since it isn't very hidden.
When Nana finds the Treasure she makes a comment about like: "That would make for a good offering."
But maybe adding a hint for it sounds like a good Idea that I may use.
Maybe I add one new buyble hint, where you get the transformationg hints.