1. the maid is working for the ministry of magic
2. and yes, the butler falls for her in this arc. There is this part in the novel where once katerina meets him a little more she gives him a brooch, which looks like the color of her eyes at one angle and his at another. i think thats when he really falls for her and right after that pins her to a bed, and bakarina thinks that he is about to use dark magic on her and that she got bitten by a 'bug' again. And he was really trying to get gerold and alan to renounce their right to the throne, and was going to use selina to take the blame for it.
About selina- She is being controlled by dark magic, and has really low self-esteem. she thinks that her fiance (Ian) hates her and thinks she's useless. her real personality is really sweet, and she feels horrible for what happened. She doesn't get added to the harem, but she does admire her. She really loves her fiance and talks to him after this, and everything she thought Ian thought of her head and he also loves her.