Daniel,
What kind of music you want to record? Jazz, classical, etc? Do you want to do it in stereo?
<I would really like to know how positioning of a mic (any mic) relates to sound quality and frequencies (ie: turn the mic this way and it'll produce less of this particular freq etc ....).>
Don't turn your mic yet...
To start, make this experiment:
Remove the upper and lower wooden boards.
1) Place the mic close to strings right above hummers on very left side (it is a bass register) hit record and play something using all registers of the keyboard.
2) Move the mic about 10-12" to the right, hit record, play again the same tune.
3) Repeit untill step by step you reach the very right side of the keyboard.
4) Do exactly the same with the lower (underneath the keyboard strings)
5) Play your recording back--you will hear that with each position the mic emphasised different frequencies.
Next step:
Do exactly the same, but move the mic further from the strings.
You will pay attention that there is some 'leaking' from other registers.
Next:
Do exactly the same.
Next:
Same.
You will pay attention the further you move your mic from the strings the more registers you will catch, along with room acoustics. Still, with every position you will hear that some frequencies are more prominent. This way you will be able to find the very best position for situation. Even more important--it will be your first step for understanding how to record piano.
I still think that you need at least two mics for recording upright. With the first, find the best tonal balance on mid-top register. With the second, fill the 'hole' in the bass. Most likely, you will place it underneath the keyboard.
Try to borrow a LDC and see what difference it makes compare to your SM57 and if it works for you.
Good luck, and report your experiences.