You really can't totally convert a DVD to BluRay, since you are trying to make something really big out of something much smaller
Comparison picture of video screen sizes http://forums.adobe.com/thread/1120039
To have a true HiDef BluRay, you need to start with HiDef video
What version of Premiere Elements are you using and on what computer operating system is it running?
Assuming you are willing to explore the consequences of upscaling the DVD-VIDEO (assumed widescreen) to Blu-ray disc format, you would do the following
Assuming that you are starting with NTSC DVD-VIDEO widescreen on DVD disc and using Premiere Elements13/13.1 on Windows 7, 8, 8.1, or 10 64 bit....
1. Open Premiere Elements 13/13.1 to the Expert workspace. Go to File Menu/New/Project and change the project preset to NTSC DV Widescreen.
2. Then place your DVD disc with the DVD-VIDEO widescreen format in the burner tray.
3. In Premiere Elements 13/13.1 Expert workspace, use Add Media/DVD camera or computer drive)/Video Importer to get the DVD-VIDEO video files (VTS_01_1.VOB and series) from the disc into the project.
4. Publish+Share/Disc/Blu-ray disc with one of the Blu-ray presets.
If you need more details, please let me know.
Add On....NTSC DVD-VIDEO widescreen DVD disc = 720 x 480 16:9 where the 16:9 flag stretches the video to 872 x 480 16:9 for display after encoding. Blu-ray disc format on Blu-ray disc = 1920 x 1080 16:9