Wow, I completely forgot about this story! Sorry I never answered any of the questions posed. Re-reading it makes me realize exactly how much was missing, and how confusing it got at times. Here's a quick summary (what I can glean from what I wrote 6 years ago!)
The idea is that Usagi, Sakura's older sister, was once her idol and best friend. But one day, at the park (after Sakura's parents yelled at her for having 'low stamina' in class), the two of them were attacked, presumably to be kidnapped and used to draw their parents out. Usagi, being a chuunin and a pretty successful nin, protected Sakura and used a lightening jutsu to ward off the attacker. Unfortunately, she didn't have enough control over it and it killed her as well. Sakura didn't cope with the death well. After the funeral, she met Sasuke, which later accounts for her infatuation with him. Over the next few years, the bullying at school and the trauma from her sister's death became too stressful for Sakura, so she created 'inner sakura', who held all the memories of her sister's death at bay. Inner sakura was a way for Sakura to vent stress and protect herself from previous trauma.
But after Sasuke left, and all her peers became stronger, and especially after she was refused apprenticeship, Sakura started becoming depressed. Kakashi finally noticed this and decided to try and bring her back by giving her something to hold on to (even if it was just physical).
After they'd been together a while, Tsunade sent them on a mission to Grass. It was expected that Grass would turn on them, but Tsunade wanted them to scout out the hidden village and report back, trusting that they were strong enough to get out. This here is probably one of the biggest plot holes. I'm not sure I thought it out thoroughly when I wrote it, so let's go with the explanation I just gave here. Sakura was used to 'soften up' the team's look, and trick the Grass village into a false sense of security. But they were tricked, and it turns out Orochimaru had already possessed a Grass nin's body. This Grass nin then plotted with the rest of Grass (unaware that Orochimaru had possesed him) to kill three of Konoha's best nin. Orochimaru meant to use Sakura to lure Sasuke, or another strong vessel, to him.
The images of her 'mind' was written with lots of creative license. The idea is that when all three of them (Orochimaru, Sakura, and Inner sakura) were all in her head, they manifested as if they were physically there. So Inner Sakura tried to fend off Orochimaru, but was overpowered. Orochimaru then sent Sakura away from the "main room" as Ino called it, and into a room where she relived her memories (esp that of Unagi's death). Those were memories Inner sakura had kept hidden for years. Orochimaru took over Sakura's body and tried to enter Sasuke's, but was sealed inside her as Kyuubi had been sealed in Naruto. By this point, Sakura had basically gone crazy from torture (symbolized by her decaying mind/body) and all that was left were old memories. When her body 'healed', she was lucid. But Orochimaru managed to harm her even in his 'cage' and she would revert back to being crazy again.
In the end, Kakashi realizes he loves her (well duh). And in the epilogue, all her memories are sealed away and she's given a 'clean slate'. She falls back in love with Kakashi and they get married.
Hope this answers your questions! I'll go over some of the questions in the review to see if I can answer some.
Timber wolf of purity: i'd like to think they did have a kid in the end
BotS: I kinda forget who I meant the blue haired guy to be (just some random Grass dude, i guess); again, i forget if Ryou saw or now (sorry!), and the one handed seals was meant to represent how big a part of Sakura Inner Sakura had become. She was basically like a split personality; she could control one side of Sakura (the part that controlled the chakra) and the real Sakura would just complete the task by releasing it through a one handed jutsu (didn't even need 2 hands bc inner sakura did the rest of the work).
Sorry I'm like, 6 years late in this explanatory chapter... Thank you guys, all, for giving me such wonderful, encouraging reviews. I really appreciate it. And if any of you are interested in Avengers, I started up ff again and am writing a Hawkeye story. Thanks again, everyone!