That aside, what am I looking at here?

Ah, well... I'm somehow ashamed to even explain.

But Yakumo, what is that thing? It seems to have crossed the barrier and descended here to Gensokyo, but is there some kind of reason for that...?

Gensokyo accepts everything. And that's a cruel, cruel thing.

When you yourself are using that line as a handwave, I feel like we're done for.