Lewis may have had Christian author George MacDonald in mind in this passage where he talks about people being slowly turned into something more heavenly or something more hellish. The same idea occurs as a theme in MacDonald's novel The Princess and Curdie, where "many human beings, by their acts, are slowly turning into beasts; [Curdie, the novel's hero] is given the power to detect the transformation before it is visible, and is assisted by beasts that had been transformed and are working their way back to humanity" (wikipedia). These transformations are symbolic of spiritual growth or regression.
"Macdonald [sic] (1824-1905) [was a] Scottish novelist, clergyman and author of children's stories [who] was admired by many of his peers for his tender spirituality through his graceful poems and fantastical verse. They rank high among the classics of juvenile literature" (The Literature Network).
Lewis "regarded [George] MacDonald as his 'master': 'Picking up a copy of Phantastes one day at a train-station bookstall, I began to read. A few hours later,' said Lewis, 'I knew that I had crossed a great frontier'" (wikipedia). In his diary entry for January 11, 1923 (years before his conversion to Christianity), Lewis wrote, "I read Macdonald's [sic] Phantastes over my tea, which I have read many times and which I really believe fills for me the place of a devotional book. It tuned me up to a higher pitch and delighted me" (All My Road before Me, 177).