The Origin Of Elder Kai's Great Magical Capabilities
Where did Elder Kai's ability to use magic so well come from? Well, Elder Kai could already use magic very well. But, when explaining how the Potara Earrings work in Dragon Ball Chapter 502, he mentions that accidentally fusing with a witch enabled him "to work magic like the..." then his explanation is cut off.
In the world of Dragon Ball, there is good magic & bad magic. To do the unnatural, such as unlocking power beyond the natural abilities, we are shown that sorcery (wicked magic) must be known. And as shown with the wizard Babidi, his minions were given power beyond their normal abilities through his sorcery.
So, when Elder Kai fused the witch, her knowledge of witchcraft was combined with his own knowledge of godly magic. This granted Elder Kai the unique ability to use his new understanding of dark arts for good in order to give Gohan power far beyond his normal limits.
Godly magic can awaken latent potential.
Wicked magic can grant power beyond natural abilities.
Combined knowledge of good & bad magic can grant power FAR beyond normal abilities.
The magic of the Dragon Gods is beyond wicked magic & Elder Kai's godly magic. This is why Shenron was able to grant power FAR beyond normal limits to Piccolo within a few seconds instead of doing a process that takes 25 hours or more to do. Dragon Gods have the greatest magic capabilities that we have seen so far. I believe it is because as gods, they are beyond good and evil. So their magical knowledge is not limited by what people consider good or bad.