I'm glad I was not the only one a bit lost reading that. I like it though. Seems an interesting premise.
Also, Gunnerkrigg Court (http://www.gunnerkrigg.com/archives/) is a pretty good read as well.
I think the bit with the fight, the discussion about being excommunicated in order to enter the witch's realm and the whole thing with the horned girls is all flashbacks of various sorts. I have no idea what it means for the vampire girl to be tiny, although apparently the audience should know. There are also moments where she's doing things to the warrior girl and others don't see her, just the reactions.
If I read it right, the warrior girl lost one arm and the other isn't functional, and uses a magical artificial arm instead. And they both play games a lot. In fact everyone in that realm does.