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Can you upgrade a summoned BL squad that was summoned via BTT?

Summoned units are not purchased in the army, so there is no place to purchase upgrades for them. What upgrades they have access to are defined in the rules for summoning the unit, just like in the rules for Conjuring Daemons in the Malefic Power set.

Its' specified what you get in the designers note at the bottom of the blood tithe table. A banner of blood, an instrument and a character- provided you have an appropriate model.

You only get 8 bloodletters alas..rather than the 10 you get from malefic. The banner is better tho.