At first, Merlon can only upgrade each partner once. But, after Chapter Five, Merlon tells Mario about a clue hidden in Hooktail's Castle involving Bobbery. This clue will help Mario's partners. This clue is an Up Arrow. Once given to Merlon, he will remember that he once bought an Ultra Stone in a Flea Market, put it in his attic and forgot about it ever since. (This is possibly a reference to the Quick Change badge being in Merlon's attic in Paper Mario). Merlon retrieves the Ultra Stone and can now upgrade Mario's partners twice. Each level still requires three Shine Sprites. Seven partners can be leveled up twice, needed three Shine sprites each upgrade, equaling 42. There are no extra Shine Sprites in the game.
Shine Sprites are based off of the major collecting item in Super Mario Sunshine.