(thanks to @cogito for writing this up, I'm copying it from discord for the forum readers here)
Let me try to summarize everything we know at this point:
--Curses "amplify the darkest recesses of a person's inner self."
--15 years ago, the Demon Lord invaded the human realm. They were stopped by the sage Bella, who could "purify" the Demon Lord's undead soldiers but as a result took on curses until she collapsed right before the final battle.
--Sometime after this, Bella adopted the half-demon Olivia in order to use her as the receptacle for her curses. But she came to love Olivia for real, and to avoid turning her evil, chose Lena to be the receptacle of her curses instead. This is why Lena is currently dying.
--At some point after Lena got married, Bella went off to defeat the Demon Lord. Apparently, her body was then used as "part of the seal in order to contain the curse" -- presumably the Demon Lord was sealed as well?
--In order to save her mother's soul, Olivia attempted to break the seal, but was stopped by a group of magicians including Lena.
--Now, in the present, Olivia (presumably) did something that has caused the curse on Lena to worsen.
What hasn't been confirmed but seems likely:
--In the "original game," Lena died to the curse, around the time of this flashback arc. Presumably that's due to whatever Olivia is up to.
--Yvonne and Elsa will somehow free Lena from the curse, preventing her from dying. (This, presumably, is the reason Future Elsa sent Yvonne back to the past in the first place.) This of course would require finding a new receptacle for the curse -- Yvonne herself, perhaps? As an otherworlder, she may be an exception to the curse's negative effects...
--Whatever they do will also lead to the Demon Lord losing their powers, becoming a girl, and turning into Faye in the future.
Olivia's fate is still very much up in the air, though. It does seem likely she has some sort of relationship with the main cast. Her being Elsa's mother is a plausible theory, but there's some strong counter-evidence too; she doesn't seem like the type of person who'd have a kid, and she even says directly that Bella is her only family. I would therefore like to propose a couple of other theories:
--Olivia might literally be Elsa. We already know time magic exists in this world. It's possible the climax of this arc will involve time-regressing Olivia to infancy and sending her to the past, or perhaps doing the same with her reincarnation or something. Elsa being half-demon could explain why she's so talented in magic as well.
--Alternately, the character Olivia is related to might not be Elsa but Yvonne. One aspect I still find notable is how Yvonne is apparently super susceptible to possession. (Presumably this is why she got possessed by the protagonist from our world in the first place.) This "susceptibility to possession" strikes me as similar to how demons apparently become evil if they get cursed -- and despite how important it is we still don't know many details about what this "curse" actually is. It would also be kind of a neat twist if all this lore was really about Yvonne and Elsa in the end truly is just a random orphan girl who happened to be born with OP magic powers.
(Also, in defense of Olivia, Lena seems to have been her only friend, and she betrayed Olivia by stopping her from freeing Bella from the seal. It's understandable to me she would go to this extreme to free her mother. I'm sure Lena doesn't hate her either.)
