I updated my watchtower from level 15 to 16, mainly because I only missed about 3k iron storage to be able to upgrade my stronghold to level 19. Well, my watchtower did upgrade to level 16, but my iron capacity is still the same 
I lost about 2 days of waiting and am now upgrading an iron storage building instead.
The watchtower produces food/iron, to my knowledge it does not store it.
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It only upgrades its own internal storage, not your general max storage. You’ll notice there is the same feature for your farms and mine.
Upgrading your iron storage is what you needed. You are well on your way now!
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Oh you’re right. My bad. I thought it was the general storage.
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