it's not your pets AP level (that's for equipping battle scrolls), it's your own AP (alchemy points) level, which increases by making more items at the alcove.

You're welcome :D
I haven't a clue on that unfortunately - I didn't keep tabs on how many things it took for each level (wish I had though!)

: On the alchemy page there should be points left until next level. I haven't figured out the rules yet but it seems each item you create will award you 1-5 points toward the next alchemy level. Btw if you want the beanbags you can send me ingredients and I'll create them for you for free. It's okay if you want to earn them yourselves though ^^