I don't know how the upgrading works, can't find it out either, I literally pressed every button while hammering.
And yes, there is a piece of terrain missing there, I'm going to make an update video soon on all the glitches, problems and texture/terrain fails. Because I found something in the church, some thing(s) in the area's that are currently unaccessable. I will inculde them but since they are not supposed to be open yet it doesn't really matter. there are quite some visual glitches possible that need fixing though.
I just hope that Dasius will actually see it...