how is your ear and interpretation developed? does it just automatically get better as you play?
would it be possible to understand the characteristics of an instrument if you played on the same upright your entire life? (other than in recitals, i play on a grand, but i don't feel much different than playing on an upright)
I will answer from my own experience. I did not have the usual path of people who are taught from childhood. That might even be an advantage here, who knows. Exploring:
There are things we hear by ourselves and notice about the instrument as we start to play, and we use all that. That's all good. I also found, once I got a (good) teacher, there were things I had noticed, I got insights into some of these things, what was behind them, and that brought me further.
One initial weakness was that the pulse in my playing tended to be uneven, but I couldn't hear it. My teacher pointed it out, and gave me ways of practising it. I'd practice, think I had it right, but I didn't and couldn't hear it, practised it more etc. Eventually I could hear it
and correct it. Since I could now hear it, it means that my ability to hear this aspect had evolved. Now I could hear it everywhere. The radio was on: I delighted in the wondrous timing of the orchestra. That timing had always been there, but I had not heard it. Once I had control of pulse and timing, and could hear it, I also started to be able to use it expressively. For example, there is the "agogic accent" where you play with the timing of a note to make it expressively, a bit like what a master orator might do.
So - as you work toward things that you were not aware of and could not hear before, your actual ability to hear and distinguish things improves. This gives you more ideas on what to do with your music. It also helps you hear what other performers are doing to pull off something amazing in their playing.
About the instrument: Technique involves three elements. Knowing what you want to do with the music (timing, dynamics, articulation). And then how to physically act with the instrument in order to bring out the sound. The nature of the piano includes the fact that strings vibrate after the hammer hits them, will stop vibrating when you release the key, but continue vibrating if the pedal is held down; the degree to which subsequent notes will blend depending on the timing of this (legato, staccato, unpleasant blur). The fact of the pedal can allow for an early release, and thus possibly a looser hand, and smoother transition to distant notes. Understanding how to time and coordinate all that allows you to make choices that will affect the music (its effect and interpretation). As I started working with my teacher, I benefited from his experience. There were things I would never have thought of, which came from these three elements.
It was hard to answer, so I hope this makes some sense.