She means that in past universes (since it's a game) she got everyone on her side, and when Penelope came the game reset, because that's what games do.
She's a laylan (idk how to write it) aka an evil mage. Long time ago there were mages, laylans and humans. The laylans got their magic through sacrifice so nobody liked them. The mages got together and banished the laylans into the mirror, and the humans, who mistook mages for laylans, started to shun the mages. Now mages are rare and bullied.
Yvonne is the dukes daughter, who got lost during a festival. I don't remember this part very well so there may be some mistakes. She was kidnapped by some people i think and somehow died. Then an ancient laylan posessed her, that's why shes all creepy now. So shes the real daughter who died and a laylan possessed her dead body.
Whats happening what does she mean he once loved her? I dont even understand whats going on anymore and to be fair im only in it for the romance can anyone explain, like her origin is she a fake- like shes just a spirit using her physical body