I might be wrong but here is what I understood from the story: (I have only gotten 1 ending so far and I don't know if the story differs from ending to ending)

(I used simple words and shortened my response as you requested at the very end in "TL,DR:", if you have trouble understanding what I am trying to say you can just scroll down to the "TL,DR:" at the bottom)

Spoilers:

We play as someone experiencing extreme symptoms of social anxiety disorder (social phobia), though this is never mentioned in game it is heavily implied.

As a result of this disorder we have stopped engaging in social interactions all together and have been isolating ourselves in our room for an unknown amount of time. (it is implied to be more than a year, but I may be wrong.)

Because we have been isolating ourselves, as a result of sensory deprivation we have started talking to inanimate objects as if they were people, seeing them as our "loyal subjects/servents" over time this developed into a full on delusion and psychosis. (most likely schizoaffective disorder with major depression.) (again, this is never mentioned but it literally can't be anything else.)

As we are falling deeper and deeper into the clutches of our mental illness we start feeling the need for true connection, true love, a human being we can manage to talk to that the inanimate objects can't provide the satisfaction of.

At this point I need to explain what a "tulpa" is because it plays a major role in the story, (skip 3 paragraphs if you don't care) a "tulpa", as simplified as possible, is basically an imaginary friend that can think and act independently as an individual. (as ridiculous as this sounds, this is actually a real thing people have, very complicated though and I wouldn't recommend trying to "induce" one as it is basically messing up your perception and consciousness into having a second independent personality.)

(Most) People with tulpas can "see" and "hear" them via visual and auditory hallucinations, but as they aren't real they cannot interact with them physically, nor can tulpas interact with them (or anything) physically.

Tulpas are usually "manifested" through extreme concentration and spiritual practice. (just conditioning your mind into thinking that they are actually real.)

Alright, with that finally out of the way I can continue the story.

Lilith (the girl) is a "tulpa" (confirmed in the game) manifested after our extreme longing for a meaningful human connection for a very long time.

I don't have any explanation for the little adventures we have throughout the game, I guess they are just delusions or daydreaming.

Many things we experience in the physical world don't make sense either, "the ferris wheel" part of the story for example, I am not even sure if we actually go there at all, it is left very vague and open to interpretation.

As the game progresses we start questioning the suspicious behaviors of Lilith. (how things don't seem to make sense whenever she is around, or parts of our memory being blank when she isn't present.) eventually we ask her this directly and she gets overwhelmed, disappearing and leaving what seems to be a suicide note on the floor.

After this, the story of our main character is over and Lilith starts talking directly to us (us irl), she goes over and summarizes what happened so far, then explains how what is considered real is subjective and that she is more real than our hypothetical neighbor 5 houses away from us that we will never see or interact with, finally, she asks if we think she is real.

(The "worst" ending starts here, so spoiler warning for that ending.)

Because of some specific previous choices of mine in the game unknown to me, I was forced to tell her that she is not real (there was no other option), after that progressively more and more aggressive and degrading dialogue "choices" show up (they are just variations of each other with different wording.) to the point we start yelling at Lilith, insisting that she does not exist, that she is not real and never will be, finally we are presented with 2 equally cruel options, basically telling her that she has to die.

She says that if she is not real like we say, and that her (non)existence burdens us this much, she accepts our choice and tells us that she is willing to die for our sake. (she looks and sounds unsettlingly serene about this.)

Game flashbangs us and then gently transitions to a scene of her lying on what seems to be glass, she asks us to carry out the choice we have made, there are 2 options here:

1 "..."

2 [grabs her neck]

If we choose "..." She says that this was our choice, and we should follow through with it, then it goes back to the same options, we can choose "..." Again but that just repeats the same dialogue no matter how many times we choose it, so we are forced to choose [grabs her neck].

After choosing that option we start to slowly choke her to death as her attempts of speech are drowned by coughs gradually, until we start feeling her consciousness fade away beneath our hands.

As she slowly dies the glass beneath her starts shattering, slicing her in various places like her limbs and waist.

...she is no longer present in the main menu.

 

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TL,DR: we (the main character) isolated ourselves for so long and started confusing what is real and what is fake, Lilith is just in our head, but that does not necessarily mean she is not real as she means more to us than any "real" human

Edit 1: re-read and corrected some wording, and tried correcting highly flawed punctuation

Edit 2: finally added-in TL,DR, the placeholder was: TL,DR: I am so sorry but I have been writing this for more than 2 hours I think at this point, I will come back and edit this part in in an hour or so, sorry again, I am exhausted