Can someone explain?

The short version is that Utsuho is basically the youkai of atomic... fusion (fission? one of those) from Subterranean Animism.

Both, E-mouse.
And she's a Hell Crow Youkai.

... speaking of which... did this person... jam their penis into the third-eye thing on her chest? O.o''
looks painful.

Yes. Yes they did. If they weren't sterile before, they will be now.

I think I detected a nuclear launch just now.

[deleted]

Brings new meaning to the term: "Penis Bomb"

You didn't swallow, so now it's going in your eye!