That third "handicap" was all important and I'm glad it was there. Nanami's free will was respected in the end and I'm satisfied she wasn't treated like an object with no agency over her life. I'm surprised the jock senpai agreed to it, and I hope we never see him again.
Peach can be jealous all she wants, but she's a coward undeserving of a shot with him if she can't even face Youshin in person to deal with her feelings. She hasn't really done anything other than be pissed off at him in-game, has she?
A lot of people are speculating that she's the girl who dumped the bucket during the confession scene, and I'd say that makes sense. There's not a lot of plausible choices as to her identity at this point. I doubt she's the school nurse, for one thing. It just doesn't line up. (But if I'm told that Baron was the school nurse, I might actually believe it)