I'll try to shorten everything to be concise (I Lied).
Regarding Mikos and the holy element: Reminds me of a youkai I made a long time ago with "the ability to the extent to purge impurities/purify"
Regarding Faith: Gods can live solely on Youkai faith the same way as human faith. Kanako and Suwako moved to Gensokyo have recieved the faith of the youkai first before any humans allowing the to mantain their existence. So Youkai faith does have value in some regard, whether it's less than or equal to human faith is another matter. Although I don't think that there is much difference. Faith can be obtained through just common interactions and even just believing that a god exists (how often have I seen this trend in games and light novels). I'm just going to disregard Reimu since no one even knows who her god is. I know it's been discussed but I thought I should confirm with what I know.
Regarding music: I think arranges should be the way to go or if someone can make something that fits.
Regarding chocolate: They're all delicious, but then again, I'm not that picky.
Regarding sustenance: Yumekuko: "Delicious dreams~"
Regarding Hanzo: I actually went to Aokihagara during my trip to Japan and I sadly saw nothing. If something exists, mere humans cannot see it nor wander in so easily as thought. I think making so many characters might become a problem later on for you in terms of practicality.
Regarding Magicians: Literally, it's all because of magic, not much to discuss. Youkai and Human Magicians learn different spells to become full-fledged. I think it was abandon temper and food if I remember correctly. They don't need any sustenance but most do just because food tastes good. It's similar to how Rinnousuke prefers to eat full meals when he can just survive on bread and water. As for hermits, they must abandon worldly desires, including food (WHO COULD LIVE LIKE THAT).
Regarding grammer: most people's writing stays constant; it's a matter if you really want to put in the effort. Also, all-nighters are fun.
Regarding character limitation: Guess I can't make the other 20 or so characters :derp:.
Regarding Hanzo again: Not to be rude, but you strike me as a person with quite a large "Id".
Regarding my characters: Kagami: Friendship=Medium, Threat Level=Medium
Yumekuko: Friendship=Unknown, Threat Level=Very High
Sorry for the long list of randomness. (*?∇`*)