Hmm, that isn't exactly how the EP upgrading would work.
You can buy higher quality things for more EP, but it is based on availability. Theoretically you can happen upon a mystical armor piece and get lucky enough to be the one to snag it (assuming you can afford it) but you can't just shell out more EP and make something better.
Also I like your cult idea in general. Something our duchy tried to do was create one centered around the sunstone as you mentioned (link) but since we weren't lucky enough to win it we had to re-purpose our cult into a more general one instead of worshiping the object itself.