The way I interpret it is that Shinji has more personality from Loki's fragment being in him, so he naturally veered toward that, while Shin was purely a sword and swords don't have genders. As he (for simplicity's sake) develops, a distinction may form or not. Currently Shin is a sentient sword...
Willow is written as Viro in kana and makes far more sense as a name in a setting that largely uses real names. Just because the wn translator didn't bother thinking doesn't mean the author didn't.
I think that the reveal is that the wolf girl was acting the entire time, trying to make LRRH unable to leave her.
Regardless, the tl;dr is "psychosis".