I upgraded the Inn to level 2. It is rebuilt, and I can go inside and interact with all the NPCs no problem.
However, when you go outside and walk around the building, the inn’s graphics are all buggy, the plants and flowers jump around and get blurry. Also, when you get close to the front entrance to go inside, instead of it saying “Press Y to enter the Inn” it says “no interaction hint!”.
This appears to be that the proper entrance phrase is not loading or was not added.