I love how I came into this thread to this page and don't have the slightest clue what the hell it is that I'm reading.
Anyway, installed this game recently. Pretty cool but I have no idea what I'm doing with medal and keyblade upgrades. All the options are pretty overwhelming for a newcomer.
There's really not all THAT much to it. Upgrading medals involves four main things:
1) leveling them up.
2) evolving them
3) boosting their attack & defense power & lowering their cost
4) combining two medals of the same type to improve their special attack multiplier (and later to "guilt" the medal for even more attack power)
For a more thorough explanation:
1) Medals are leveled up with Huey, Dewey & Louie Experience medals. The better the Huey, Dewey or Louie medal, the more Exp it gives and as such the more level ups you get (so a 6* Dewey medal gives more Exp than a 3* one). Also, using a Red experience medal gives more Exp to red (power) medals, so you'll usually want to focus the experience medals of different attributes to their corresponding attack medals.
2) Once you level up a medal to its current maximum level, you can evolve it to the next medal level. For evolving, you'll need Evolve Medals, which differ based on what level & kind of medal you're evolving. To evolve 1* medals into 2* medals, you need 1 Cheshire Cat. To evolve 2* medals into 3* medals, you need 2 Merlin medals. To evolve 3* medals into 4* medals, you'll need 3 Fairy Godmother medals. At this point it gets a little more complicated. To evolve a 4* medal into a 5* medal, you'll need 2 "generic" Yensid medals and 2 coloured 4* evolve medals (Merrywheather, Flora or a third one I forget) that correspond with the colour of the medal you're trying to evolve. To evolve 5* medals into 6* medals, you'll need 3 "generic" Sorcerer Mickey medals and two 5* evolve medals of the corresponding attribute.
3) In addition to these leveling up & Evolve medals, there are Chip, Dale & Cid medals. Chip medals permanently boost the Strength of the medal it's used on (there are 3 , the weakest one improves strength by 5, the one after that by 25 and the best one gives 150), Dales give Defense and Cid's lower the cost-of-equip of that medal (each medal costs something to equip into your keyblade's slots, you can't exceed the cost maximum that you currently have; you get more cost by leveling up and buying them from the Avatar Parts).
4) The final and most important thing in the long run is combining attack medals of the same type. So if you have, say, two 3* Pluto medals, you can combine them and get a small boost to your special attack's multiplier (use "Level up" and just use the other Pluto as if you were using Exp medals). The medals you are combining need to be of the same *-level. So you can't combine a 5* and a 3* one to get the boost. This increase in special attack power is indicated by yellow dots in the special attack info window when looking at the stats of the medal. 3* medals can have only 1 dot, 4* medals can have 2 dots, 5* medals 3 and 6* medals can have 5 yellow dots. Once you fill up all 5 dots on a 6* medal, there's this thing called Guilting, which means combining one last 6* medal into a 6* medal that already has 5 yellow dots. It will give yet another indicated by some sort of percentage. Different medals have different max-guilts, so some can have 25%, some 50% and the best ones have 130%. "Guilting" medals only opens up when you reach Quest 200, so it doesn't matter if you don't quite understand it yet.
+ Each attack medal can have 1 skill that can give different perks to your medal. Medals you pull can randomly have a skill given to them or you can get Scrooge medals in different means (as special event rewards, Coliseum rewards & avatar boards etc.) that can give different skills to your medals. Things like Attack Boosts, Defense Boosts, Poison, Paralyze & such.
As to what medals to level up & evolve, go to the medal tier list that was linked in my previous post. Look up your medals you currently have, see what are ranked the highest -> focus on leveling up & evolving those first. Be aware that the cost rises every time you evolve a medal, so you don't want to be too quick in evolving your medals into 6* ones, until you have enough cost (which, again, you get more by leveling up, unlocking avatar boards and buying Cost nodes from those avatar boards). A single 6* medal's cost is 46 (before using the cost-lowering Cid medals) whereas a 5* medal only costs 14. So you'll want to be sure you can actually use the medals after evolving before evolving them.