I am trying to upgrade a Grails 1.0.3 project to 1.3.7 and am having what I believe are related issues.
The old project has Hibernate xml files in conf/hibernate/Dom
GORM certainly existed in Grails 1.0.3.
You'll probably just have to update your hibernate configuration for 1.3.7. Take a look at the Grails and Hibernate - Reference Documentation
Unless you are mapping to a legacy or otherwise unusual database schema the standard GORM domain modelling is the way to go. It's very flexible.