From what I've heard the Yin Yang Orb sub item is actually bugged - it only reduces your hitbox's size against lasers, not other bullets like Remi's knives. Having a visually smaller hitbox can help you position yourself better, but otherwise it doesn't offer any tangible benefit. However, that also means you're completing the first turn more often with Seija's usual hitbox size, which I'd definitely call progress. 
I can't view the replay until later, but I will say that the best way to approach this card is in fact to complete it before the second loop really gets going. Circling around a second time is just not reliable at all, as you've already seen. Unfortunately, no matter what you do you're gonna need a bit of luck in the sense that the knives don't continuously force you away from whatever spot you're trying to damage Remi from. It's something you'll end up having to grind for over multiple runs, and not for the best of reasons either, but it definitely can be done, and with your improved ability to do the first loop, all it should take is one good run to pull it off.
Ah, I remember reading that about the Yin Yang sub once too, thanks!
And well, I've lost a bit of practice, I'd try playing at least half an hour a day so I keep improving.... I don't want to move to anything else until I beat that, otherwise I won't do it... Damn it Remilia!
Anyway, I'll appreciate opinions on the attempt I've uploaded

I think DDC and UFO are the most fun, because they focus less on memorizing elaborate patterns and more on reflexes. It takes a lot of skill to beat any Touhou game, but PCB and IN are very memorization-heavy. I feel like every run of DDC or UFO is different. UFO is significantly harder than most Touhou games though, so keep that in mind.
Back when I played more, DDC was my first attempt at doing a lunatic 1cc, and I found it to be one of the most difficult games pattern-wise, if not the most (at least until LoLK came out). But the extra life and bomb pieces you're able to get really help, so when I memorized some routes it got a lot easier. That's why I focused more on trying to beat the patterns without using bombs, and I really enjoyed it. Maybe I'm better at reaction-based dodging than planning

Remilia's Fitful Nightmare is another case entirely, of course...