Is it possible to get Google Drive to automatically convert uploaded documents to the native format?
I know it works with manual upload
Sure, see this answer. Note you can upload a text file or a csv file and set its content type to google doc or google sheets respectively, and google will attempt to convert it. I have tested this for text -> doc and it works. You will need to set the const contentType at the start of the code to one of the supported google mimetypes.