This was me nine years ago. I ran into the same problem today, did a google search and found that. Nine years later and I think I finally figured it out.

You need to talk to Cid in Disc 1 after the SeeD test to get the preliminary Character Report. If you don't, this guy won't talk to you because he won't be able to upgrade it for you. What a bummer, I'm really tempted to start over.

Thoughts?