Hello, and thanks for the question...admittedly, VoltAge:Genesis can be a bit foggy in its directions (what can I say, I loved Rings of Power as a kid)...that being said, the best way to locate / recruit Eloin is by unlocking new characters for your party (and new townsfolk in general) and then following their storyline progression until they give you a hint about where to consider checking...in fact, the path to locating every Eloin in the game starts right in your hometown of Pedregal Springs. That being said, I can give a SPOILER-EY list below to help you track them down.
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Pazuzu (Wind) - While there is one character that can put you on the path to meeting Pazuzu in Pedregal Springs, he's quasi-secret and not necessarily a guaranteed "get"...most people will start this quest when they speak to the old lady standing in the ruins in the NE corner of Accoro Village (the farming village north of the massive verdant plains area N of the road to the western mountains). Follow her instructions, progress through the caves, and get ready for a NASTY fight!
Yer Tanri (Earth) - Speak to the Gardener in Pedregal Springs (near the fountain), and track down each of the three types of produce he asks you for (Cave Mushrooms, Medicinal Herbs, and Bizarre Fruit) once all three quests have been completed, speak to him again. You should have little difficulty tracking down the Eloin of Earth with his assistance.
Nanshe (Water) - Once you start the quest to locate Eloin, examine the monument near the fountain in Pedregal Springs to start the quest (if Zach and Casey have moved to your town, they will give you hints to check out the area as well). Once you reach the temple in the mountains (which it sounds like you did), you need to go to the deepest section of the caverns under the temple...the dragon scales you refer to are at the top. Just keep following the glowing statues, and you should locate the Seed in no time...but, consider bringing some StealthGens to avoid those tough fights along the way!
Jack Frost (Ice) - Completing all of the quests from Nyla (the pink haired Scavver) will eventually end with her family's store having many of the best pieces of gear money can buy (including the Crowbar you asked about) at that point, she will suggest speaking to Amelia, back on Mateyo. Catch a ride from New Panavinto back to Mateyo, and complete the quests involving Boomer variants in the area, then use a Crowbar to pry open the broken elevator and descend into the sub-levels of the military base. When you get to the end, you will face off against Jack Frost, the Eloin of Ice. Incidentally, if you want to save some cash, there is a Crowbar hidden in the left-most storeroom of the Konolo Ruins base.
Azazel (Dark) - While you're on Mateyo, you may want to pay your old friend Azazel (the Eloin you met at the end of the first major storyline arc on the island of Mateyo) a visit back in St. Joseph's Road (the abandoned temple). Be sure to bring a strong light source, or you may be in trouble.
Taranis (Electric) - Once you have recruited several other Eloin, Taranis will automatically appear as soon as you enter Pedregal Springs and challenge you to a battle. Admittedly, this can be one of the nastier Eloin battles because you might get denied an opportunity to do much prep work, but I believe in you! Defeat Taranis to obtain his relic and (maybe) a powerful spear as well.
Ogoun (Fire) - Upon defeating Taranis, you will receive a hint as to where you should go to track down Ogoun, the Eloin of Fire...search for him in the ruins of Oca Ronga, the city where the southern portion is blocked off do to constant gunfire. Once you track him down, you'll have to fight Ogoun, but he is very similar in strength and tactics to Taranis, so he should present a minimal threat.
Poimandres (Holy) - Once you have completed all of the quests from Delphine (the monk trapped by the cave-in at Rieldara Valley) speak to her again at her usual hangout near the fountain in the center of Pedregal Springs. From there, it should be fairly easy to acquire the powers of Poimandres, the Holy Eloin.
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And there you have it! To answer your other question, there is a mercenary in the the cave system just S across the lake from Estancia (the abandoned town NE of the starting area) who will sell you a Sledgehammer once you have returned from your first trip to Mateyo. Failing that, you may get it as a drop / steal from a Steel Legion Fighter, though not all variants of them will be carrying one. As was stated before, Nyal's father will sell a Crowbar once you get the final upgrade to their shop, or you can find one in the Kanolo Base.
Equipping the Eloin's relics will grant you the ability to use a powerful spell associated with their element while also granting you immunity to damage from that element; if you have recruited enough Eloin for them to feel like they have a chance, they will show up and deal a large amount of damage to the final boss to give you an edge.