In DSII, you no longer ascend a weapon to a Boss weapon using a boss soul. Instead you 'trade' the boss soul and some additional souls to 2 specific NPC's to get Boss weapons.
The first is Straid of Olaphis who can be found petrified in a jail cell guarding a bonfire at the top of Lost Bastille. Using a Fragrant Branch of Yore will allow the player to trade boss souls with him. To be able to trade with him, you need at least 3 Intelligence and 3 Faith. This is a one-time requirement. If you later redistribute your stats with a Soul Vessel, you can still trade with him so long as you have talked to him with the required stats at least once.
The second is Weaponsmith Ornifex but you must unlock her before you can trade with her. To unlock her visit Shaded Ruins, to the right of the bonfire is a petrified enemy, you can jump from the ramp onto the raised walkway and use another Fragrant Branch of Yore on him and he will drop the Fang Key. After getting the Fang Key, drop down in the pit next to the giant Green Basilisk and use the key to open the door. This is the first time you meet Ornifex and she will tell you she is moving to her home.
She will then move to Brightstone Cove Tseldora, in the room next to the Brightstone Cove Bonfire. Talking to her here finally allows the player to trade the rest of the boss souls to her.
Keep note that depending on how many bosses you have fought before unlocking Ornifex, will be the number of boss weapons she has. She will not show you boss weapons for bosses you have not beaten yet so always come back to her as she will craft the weapons for all bosses in the second half of the game. Also, once you free her, Ornifex will perform one, and only one, Boss Soul trade for free.
Human Effigies can be found from Starting Gift, Static Locations (corpses), Merchants (All merchants have limited supply), and NPC's (both given and dropped when killed).
The term 'farm' usually implies an unlimited resource, as you pointed out. As of the latest patch, the Company of Champions covenant allows infinite respawn.
These are enemies that drop Effigies:
- Attack Dogs.
- Skeletons [not in Undead Purgatory]
- Turtle Knights.
- Sentinel (Sword/Shield) and Sentinel (Great Sword)
Always remember you can farm 6 effigies off of the Old Firekeepers and 3 alone off Housekeeper Milibeth in Things Betwixt.
After unlocking the Shrine of Winter, it is possible to farm Smooth and Silky Stones. While not directly farming Effigies, these have a high conversion rate to Effigies at Dyna & Tillo (Drop trade crow), although this is random.
There is however a way to restore humanity consistently.
In the Shrine of Amana, above the last bonfire, there is a Shrine with a praying Milfinito. After you have 'rescued' the two stray maidens (one outside the Demon of Song room, another behind the Embedded Door in Drangleic Castle) you can pray at this Shrine at any time to regain humanity. This is free of cost and can be done a limitless amount of times.
There is an easier way, although it seems so easy that it will be patched.
This requires the Ring of Life Protection, which can be found at the No Man's Wharf. This ring prevents loss of your Humanity and souls on death, but breaks afterwards. This ring can be repaired for 3000 at the blacksmith giving a constant 3000 Souls per Human transfer rate. A +1 Ring of Life Protection (Also prevents petrification) can be purchased from Vengarl in the Shaded Woods.
Best Answer
No, bosses defeated while you are summoned as a phantom are not counted towards your own world's progress.