RTF is a global modification that replaces all towns in the game.

I've started working on the upgrade, but I don't know how to design it yet – with crystals or bats. If the abilities are magical, then the former would be better, but I haven't come up with the abilities yet.

Are you familiar with the "Pursuer" from Dark Souls 2? I'm looking at it, and that red eye just begs to be included. As an alternative to the usual bats and skulls, you could add some decorations to its back. Think of something in between winged hussars and a demon lord with his spikes... or even Diablo. There's plenty of room for imagination, even if you stick to "realism." 🤔

Added 2 minutes later
You could also add some "gear" to the horse itself. Like how a Barbarian hero carries a lot of different weapons and trophies that they don't actually use in battle.