You won't see them in File Manager, because the File Manager app wasn't designed to display them. (You may have noticed that it doesn't display your root file system either, except for sub-directories of the /home directory.)

When the File Manager refers to "Internal memory card" or "Removable memory card", it only means the first partition of the relevant card, formatted as FAT16 or FAT32.

If you want to access the root file system on your SD card, you should boot from the card. (OK, there are a few purposes for which you might mount one root file system on another, but normally it's a bad idea.) After the cloning, did you reboot, choosing the SD partition in the bootmenu? If so, the files you now find in XTerm are the files on your SD partition (and the files in File Manager make up the /home/user part of that rootfs).

Sorry I can't help you with details specific to nupgrade or the other scripts, because I have never used them. A while ago, I always used the UNIX/Linux commands for partitioning and cloning. Nowadays, if I want to partition and format a card, I put the card into a USB card reader and partition/format it with GParted on a PC running Ubuntu. You don't even have to install Ubuntu on the PC's hard drive. You can use GParted from Ubuntu on a LiveCD or LiveUSB.