
I'ma be honest...the MC is giving major delulu vibes. Like, how do you expect that the guy you killed brutally in your first life is honestly gonna fall in love with you just because he gave you an unclear intense stare. Girl for all you know he could just be glad you haven't turned evil, but you out here imagining a whole delulu romance.

Well, because he was the only one who understood her, while everyone was calling her the demon of the cursed sword. He was the only one who saw the real her, she didn't want to become a demon of her own will. Throughout the time she was locked in azenka, he never once saw her with hatred. Even when he was dying..he kept looking at her, but there was no hatred in his eyes. So it's valid she's thinking that way. Part of it could be her own feelings. Like people often imagine their crush liking them back no? And his actions are more than enough to think like that.
You're calling her delulu now, but later when it becomes painfully obvious that he has feelings for her and she still doubts him, you'll be frustrated.

This ain't my first shojo, I know obviously they're in love with each other and all. The thing is that the way she just assumed he was in love with her is kinda crazy to me because I'd first assume that if he had his memory he'd (1) try to catch me off guard and kill me, or (2) he's trying to keep her happy/comfortable to prevent the horrible future that has happened.

If I was lily, I took would take the secret of not being a princess to the grave. Clearly there is a lot of political unrest from her husband's family if they can easily threaten to assassinate a foreign princess. If it's easy to kill a princess then they would have no hesitation to kill a commoner much like prince passed told the ML to do.
So the general is into futas... What an unexpected piece of lore lol