Um, I have to admit I just plain don't understand the whole angle about Reimu being in charge of the peaches because she attacked us. She was mistaken, she flew off, and we're still in charge of the grove in any event. We already said everyone could have a couple if they really wanted, and I don't think there needs to be any more complications to the situation than that. In fact, that's what I was planning to land and tell the celestials in the grove: If anyone else shows up and asks, politely offer them a couple and avoid causing issues unless they do something more drastic.
Edit: Also, all of that seems essentially fine to me
>"We stopped fighting, but I'm not sure that was really a win or loss on either end. I told her what happened, and she's checking my story now. If all goes well, we won't have to finish the fight at all - I'd rather help her get things back to normal, anyway."
>"These islands fell from the sky, though I'm not entirely sure why yet. I'm, uh, friends with the people that live there. We don't mean to hurt anyone or get in the way. Though I guess we can't entirely help the last part..."
>"I don't think any of us really want to fight right now. And since the people there take care of the peach trees while the peaches grow, it's fairest for them to keep the peaches. But since the island's getting in the way right now, it'd probably be fair to give people a few to make up for that, as long as they're friendly."
>"So if you don't fight with the people from the island, I'll see if I can ask them for a few peaches for you. Is that okay?"