You can upgrade your tent by interacting with Flamey then selecting the "Upgrade my tent" option.

Upgrading your tent will increase its storage space, allowing you to store more items. Additionally, the look of your tent will change depending on the upgrade, Lastly, your tent's interior becomes larger after hitting certain tent-level upgrades, which will enable you to decorate it further.

Please note that upgrading your tent costs coins. The amount required to upgrade your tent also increases every time it's upgraded. There is also a limited amount of times you can upgrade your tent.