I remember an upgrade to Dreamcast being mentioned in the Official Dreamcast Magazine in the U.S. but I don't remember what issue. I don't see how it could be done. The Dreamcast just wasn't designed to be upgraded, AFAIK, unlike the Saturn which had the cartridge port.
No it wasn't and to be fair most consoles aren't . I think SEGA really meant that the Power VR family was scalable and you could have full BC as show in NA@MI II which had full BC with all NA@MI games and kinds of shows that if SEGA made a DC II , it would have been able to play all DC games too .
Panzer Dragoon Zwei is
one of the best 3D shooting games available
Presented for your pleasure