I really like Reimu's cut in on the HP gauge. By the looks of things, probably what would be the 'Birth By Sleep' of the Touhou-Kingdom hearts picture series?
It seems that the first phase of this battle seems to be that you have to damage the Ghost Half first enough for it to retreat into Youki, so that he becomes whole, thus being able to be damaged. to be fair, the Ghost half has pitifully low magic defense and can lose half a bar of life from a well Aimed spell like Firaga, Blizzaga, or Thundaga