(Partial answer.)

In a comment to the question, JS1 has explained the clue to the first step:

Applying that instruction to the ballad yields:

That's ...

Wrap-up: The Making Of The Ballad of the Dragonborn

This is not a solution to the puzzle, but provides notes from its poser. This type of answer has been approved by the community.

Caution: This post contains spoilers for every step of the puzzle.

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Inspiration

At heart, I'm a writer. I love writing; fiction, blog posts, poetry - heck, even help center articles. And after seeing some of GPR's poem puzzles, I really wanted to try writing a stego-poem at some point. And although it took me several years to get around to it, this was the result.

I also took inspiration for the acrostic idea from traditional Jewish piyutim. It seemed like a fun challenge to not only encode a message into the poem I was writing, but to also include an acrostic at the same time. I wanted to challenge myself.

I had originally planned on including an acrostic with the last letter of every line and not just the first, but I quickly dropped that idea; that was just a bit past my abilities and the amount of time I was willing to dedicate to this.

Creative and logical steps

Riddle me the sun!

The first thing I did to start working on this puzzle, after I had decided to create a stego-riddle with an acrostic, was to decide on a final answer. I thought about it a bit, and decided that "the sun" would be a nice topic to write a riddle about. It's a subject that lends itself to creative interpretation - such as "dancing", and can be approached from several different standpoints (mythology, history, science).

Once I had an answer, I had to decide how I wanted to clue it, and what the riddle would be like.
Because I wanted to challenge myself with this, I decided that I wanted the riddle to be in verse. I wanted it to rhyme, and if I could get the meter to be somewhat standard, even better.

So now, I knew that I would be writing a riddle about the sun, in verse, which I would then stegonagraphically hide in a poem. (I hadn't yet planned out how I was going to hide the riddle.)

I was in a bit of a "creative license" mood when I started writing the rhyming riddle, which led to the first paragraphs being a bit more... loose... in their interpretation.
And as anybody who's played Contact with me knows, I'm big on mythology. How could I write a poem about the sun and not include some mythological references?

I incuded references to Apollo (Greek / Roman), via "arrows"; I figured that would probably be the best-known mythological reference.
I also included references to Egyptian mythology, with nods to Apophis ("Chaos"), and the three parts of Ra.

I figured a reference to one of the Seven Wonders of the Ancient World - the statue of Helios - also wouldn't hurt. It turned out that this was one of the most difficult lines to make rhyme; I spent several hours reworking just the last words of this stanza.

And the last of the "riddle" lines was about the heliocentric view of the universe, and that being discovered to be incorrect.

While this was completely unintentional, in the end this resulted in the lines being in largely chronological order. I started with the human view of the sun ("Moving, spinning, sinking, rising"), moved on to ancient Greek and Egyption mythology ("Arrows streaming through the air", "Chaos reigned when I was not there"), then the Helios statue (which was slightly later), and then the heliocentric and non-heliocentric views of the universe (which was centuries later).

I did absolutely no research while writing this riddle; I wrote it entirely based off of prior knowledge. (And yes, I did learn a lot of mythology from Rick Riordan; what of it?)

Throughout this entire riddle, I tried to sneak in as many words related to fire and light as possible; my favorite was the line "Glory was mine as victory shone"; it was a reference to Ra's triumph over Apophis, and also the sun (Ra) shining.

All in all, it took around two weeks of on-and-off work for me to write this riddle, make sure it rhymed, and have it in a state where it was ready to encode in the larger poem.

The Dragonborn!

I had no real plan for where I wanted the "outside" poem to go. I had no plan in the slightest apart from the acrostic and stego requirements. I just started writing, and let it take me where it wanted to go.

In practical terms of how I wrote the "outside" poem to include the hidden riddle, I took every word of the puzzle and put it on a different line. At this stage, it looked something like this:

moving
spinning
sinking
rising
dancing
all
throughout
the
night

I then wrote out the beginning of my acrostic:

A moving
B spinning
C sinking
D rising
E dancing
F all
G throughout
H the
I night

...and started writing, with no real plan, just seeing where it took me.

I then ran into a brick wall... also known as the letter "X".

Words that begin with X are notoriously difficult to find, and even harder to make sense of in the context of what I had written so far. (What do xylophones have to do with epic quests?) And so, to solve that problem, I thought about it for a day and settled on a solution: Just make up a word! I decided that creating a fictional deity would be the easiest route; I could then also include "By Xhad!" and "Good Xhad!" etc., just to spice things up a bit. (I did end up forgetting how I spelled it and included it with a "Z" instead of "X" by the time I had gotten through the whole thing, but luckily not in any crucial places.)

It took me I think about four days just to write the first line of acrostics (A-Z, a single line per letter). (That meant total, I was about two and a half weeks into this venture.)

I then spontaneously decided that I wouldn't just do a single line per letter for the next round; I'd make it double. I knew I was in absolutely no danger of running out of words in my original riddle; I had plenty of space to work with.

And so I did. I wrote out the double acrostic, wracking my brain for words, writing strange visions and lines that made no sense even to me while I was writing them. (Anyone would think I was on drugs while writing those scenes with Death and the flames.)

I don't remember how long it took me to write the double acrostic; certainly a while. (At least a week, possibly more; it's a bit of a blur by now.)

But then I got an even crazier acrostic idea. I'd take a letter (A). Write a line (A). Take the next letter (B). Write two lines (now at ABB). Take the first letter (ABBA). Take the third letter (C, so now we're at ABBAC). And again (ABBACC). Then take the first letter (ABBACCA). Then take the second letter (ABBACCAB). I was going through each letter, using it twice, and then inserting all the previous letters except for the last one. ABBACCABDDABCEEABCDFF... etc.

That was way too complicated.

It was so complicated that I gave up after the "I"; I had literally spent weeks at this point on that single pattern, and it was just confusing me too much. I was getting lost.
So I switched to a different acrostic.

I had discovered, throughout this writing, that it wanted to focus on whoever this "Dragonborn" was. I had no idea; I'm not even sure where the name came from (I probably heard it somewhere and just stuck it in. I've now learned it's used in Skyrim). In any case, I switched to an acrostic that spelled out DRAGONBORN.

I did this basically for the rest of the poem, until I didn't have enough words left in my riddle (the original sun riddle) to spell out DRAGONBORN again. I switched back to an alphabet acrostic, and wrote some concluding words.

So then I had it: One rhyming riddle in verse hidden inside a massive pile of acrostic nonsense. Whee!

Then came the proofreading.

Did I get the alphabet right at least?

Proofreading, as anyone who's solved any of my older puzzles can tell you, is not my strong suit. I'm known for not proofreading well, leading to mistakes that will trip people up who solve my puzzles.

To make sure I had gotten everything right this time, though, I did some thorough checking.

First, I copied the "epic poem", and deleted everything except for the first letters, to check the acrostics. I checked, and double checked - especially the ABBACCABDD one - and everything seemed right.

I then checked to make sure that all the fourth words were in the correct position. I went through manually, counted and counted again, and copied out the fourth word of every line. I did discover a couple instances where I had accidentally pushed the correct word to be fifth or third, but I was able to fix these with relative ease.

By this point, I had spent roughly three months altogether on this. I had written the riddle, made sure it rhymed, checked the meter (sort of), encoded it, written the acrostics, checked the acrostics, checked the fourth words, and everything seemed to be perfect.

It was it this point I realized I had made a large oversight.

Oh, D'Arvit

Sure, I had encoded the riddle to be every fourth word of every line. But I had forgotten to indicate that somehow. I hadn't included any sort of instruction for how the riddle was supposed to be found to be solved.

Oops.

And so, I wound up spelling out the word FOUR in the introduction to the "epic poem"; I hadn't been planning on including an intro, but since I had forgotten to give any other method of instructions on how to find the riddle I had forced my own hand.

Ideally, I should have included this in the nonsense poem itself, perhaps even in the acrostics, but I simply failed to think of it.

Whew!

And so, finally, it was ready to post. I had checked, and double checked, and triple checked everything; I had included instructions, albeit in a less-than-ideal way; I was ready to post.

Resources

I tend to create my puzzles in a plain-text environment; actually, that's what I use to write most things, including this very making-of post! This allows for direct copy-paste of the Markdown into the post.

I did everything manually, including checking the acrostics and counting the words to make sure that every fourth word was the correct one; and again, I did absolutely no research. (I probably should have, just to make sure my mythology etc. was accurate, but I didn't.)

Evolution

At some point during the writing of the epic poem, a month had passed since I had last used my "Xhad" X word, and I included it in a "By Xhad!" exclamation... except I had forgotten how I had spelled it, and used "Zhad" instead. Oops. (There were a couple other small typos - dangers of working without spellcheck - but nothing major arose.)

I added a few hints as time went by based on where people were up to with solving it; when nobody was even finding the riddle, I added hints for how to find it; when nobody was solving the riddle, I added some hints on solving it.

Takeaway

Protip: Acrostics are hard.

If you're thinking of doing something similar, be prepared to do a lot of work, a lot of it manual; it's harder than you think it is to write in acrostic, and including an acrostic and a hidden word in a specific spot really cramps your writing style. Embrace the wacky, though.

All in all, this was quite possibly the most work I've ever done for a puzzle (and I'm saying that having helped develop real-life escape rooms, and now online ones as well). I don't think I've ever spent months like this on anything else. I thoroughly enjoyed creating it, though, and I'm quite satisfied with how it came out in the end.