It's because you're not going fast enough while going upwards and therefor stalling (which causes you to lose lift).
You can flick your Wii remote to flap your wings and fly upwards.
Almost anything you upgrade stays upgraded (such as the slingshot).
The exception to this is shields. While you will be able to re-buy each type of shield if it breaks (such as the wooden shield and the sacred shield), you will have to pay to upgrade it again (upgrading the wooden shield to the banded shield, for example).
You can, however, get your shields fixed before they break, so you won't have to go through the upgrade process each time.
Also, if you get the Sacred Shield, it will regenerate over time, so if it is close to breaking, you can always put it away for a while and it will heal itself. The same is true for its upgraded forms.)
Best Answer
Should've searched harder. There appears to be a list here.