His mom no logner exist, his sister is busy holding off the "evil" tsukumogami, and if his first isn't Kiriha there will be riots.
They met Kanaka's soul in the afterlife and after the whole thing her soul mysteriously vanished in a pillar of light which even surprised that guard leader, who only saw it from far away and couldn't check back on what had happened.
So, it's possible that it wasn't the last time we see her.
As for the main body, it isn't really being controlled by a Evil Tsukumogami. But rather, Kanaka has a split personality created inside of her because she was affected by Iwanagahime's lingering grudge.
And after her death while her normal personality went to the afterlife, the other personality merged with the Amasogi that Kazuya created with Kanaka old clothes (with the order to kill him). Thus creating a being who has Kanaka's personality & memories (thus making her the same as the real thing) but also bound to the condition of killing Kazuya because of the Amasogi.
The problem here is that Kazuya is a Taboo Child with a lot of curse energy. So, unless he defeats Kanaka+Amasogi, things would be dangerous for everyone around.
As for the first part, well i would just say that Kazuya is a mom-con, so him doing it with her first is possible. It's even possible that Kiriha might join in for a 3some.