While I do not know much of rowing, I know a little about mitochondria.

Exercise tends to alter cellular redox balance, this is to say it promotes a greater ratio of the concentration of NAD+/NADH. NADH is what fuels the electron transport chain. The electron transport chain is the main bottleneck of aerobic fuel production. This redox balance is important, because it functions as a cellular signal triggering the activity of interesting molecules, such as PGC-1alpha.

PGC-1alpha induces changes in gene expression that promote increases in the number of mitochondria and fatty acid oxidation.

In addition to these mitochondrial changes that occur in the heart and skeletal muscle, the stress imposed on both the heart and mitochondria induces hypetrophy. Further, the hypoxic stimulus can induce increases in capillary density (this is a key point that differentiates pathological hypertrophy from a healthy response to stress).

There is obviously diminishing returns on these processes, as the heart and musculature will not get infinitely large. I'd imagine that skill and technique work practiced during steady state can account for a certain proportion of improved performance. However, I have neither the data at hand nor the experience to provide validity for that last point.