Understanding a lot of the events requires listening carefully to what the characters say. But this could be difficult even for someone who doesn't have brain damage. The fortuneteller may be a good help. I can say from experience that throughout this game I never faced any bad turning point other than a game over from health depletion. Many characters are cruel, but they always turn out to be nice on some level. The game makes Celica a glutton for abuse.
P.S.: If you need help defeating the demoness, go visit the hot springs. There is an intricate set of events there but eventually you can gain powerful magic which will make her a pushover in comparison.