Yep to get the seeds you need to change into dragon.
I just used the "Q" key on my keyboard to change into dragon, that seems to be the default key.
Yea but if you don't have the battle tower yet then you don't have the morph stone Soulslayer spoke of. You have to win the battle tower for that and to get to Sentinel Island where it is located you need to go thru Maxos temple.
I'd build up your skills a little before that though if your still early in the game and just exploring. Be sure to make a lot of quick saves in Orobas fjords if you explore around too much by swimming, lots of level 20+ baddies in there.
Sentinel Island is easier then Orobas fjords, but in Orobas fjords you'll level up fast if you can handle the groups of baddies that is.
I'd just lure off 1 or 2 baddies and pick away at them. if they started to wear me down I'd just step/jump in the water and it'd be like you disappeared and they'd wander off or turn to my creature and demon if I used them and I could still shoot them with my bow standing in the water. If they wandered off I'd take a few more bow shots as they were walking away then if they were getting out of range I'd step out of the water and they'd come running back for another go. I'd just repeat the process till they were all cleared out. Little bit cheat-like but it worked.
Not too much to do in Orobas fjords though if you can't take your dragon form yet as most places are located up on the cliffs.