I have been playing AC3 for a while, and wondering how to craft and upgrade? I'm at sequence 9
Info about crafting taken from Assassin's Creed Wiki
Crafting in Assassin's Creed III involves raw materials that can be purchased from the Davenport Homestead, gathered from looting, or found in chests. Crafting could be done at the "Accounting Book" which could be found in the Homestead, or in any of the general stores in Colonial America, by selecting an artisan followed by a resource.
So, in addition to smitty69's answer, crafting can also be performed at the Homestead.
You'll need to complete Homestead missions, in order to gain more artisans and increase their levels, which will enable you to craft more items.
An addition to the answers mentioned above: various crafted items require a recipe as well. These are obtained by looting the various chests scattered throughout Boston, New York, the Frontier and the homestead.
An easier way to craft the items is to select the recipe itsself: select crafting, press A or Square and select the item you wish to craft. Required ressources as well as the artisan required are then automatically placed in the respective fields.
The inventions require plans, which are obtained by collecting all almanac pages of a certain set. It is possible to by maps for these almanac pages as well from the general stores.