I am interested in where string literals get allocated/stored.
I did find one intriguing answer here, saying:
Defining a string inline actually embeds the data in the program itself and cannot be changed (some compilers allow this by a smart trick, don't bother).
A common technique is for string literals to be put in "read-only-data" section which gets mapped into the process space as read-only (which is why you can't change it).
It does vary by platform. For example, simpler chip architectures may not support read-only memory segments so the data segment will be writable.
Rather then try to figure out a trick to make string literals changeable (it will be highly dependent on your platform and could change over time), just use arrays:
char foo = "...";
The compiler will arrange for the array to get initialized from the literal and you can modify the array.