Look in your moodledata/temp folder for a folder called tool_installaddon. It may not contain anything as it is used to download the zip which is then moved to the mod/block or whatever.
The 'install add-ons' should be on by default. Site Admin Menu - Plugins - Admin Tools - Manage should show that listed at the top.
"You will be redirected to the Moodle plugins directory to search for and install an add-on. Note that your site full name, URL and Moodle version will be sent as well, to make the installation process easier for you."
Are we trying to update HotPot?
Go to Notifications. To get the most recent info, click 'check for available updates' button. If there is one that Moodle re-cognizes there is a link for the add on plugins. Click that and you'll be take through the process of updating the plugin.
'spirit of sharing', Ken