So I recently read
this, which suggests that Suika is actually Shuten Douji. Two problems:
(1) Shuten Douji was "nearly twenty feet tall with flaming red hair" (
source), and Suika is... somewhat shorter than that.
(2) Shuten Douji is
dead, killed by decapitation.
There is, however, a way around both of these problems:
what if Suika is actually Shuten Douji's severed head? I know this sounds crazy, but give some thought as to what powers Suika logically needs to have in order to perform her observed feats. Her stated power is the ability to manipulate density. She has been observed to change into mist and back again, and to turn her own hairs into mini-Suikas. Density manipulation can give her the (lack of) density characteristic of mist, but when she turns into mist, she is shaped like a cloud of mist rather than shaped like Suika. So to turn back, increasing her own density isn't enough, she needs to be able to take her own shape again. I postulate that she can turn her own mass,
or any lesser portion thereof, into her own form--hence, the mini-Suikas. Therefore, if she is decapitated, her head should be capable of turning into mist before losing consciousness and then reforming into her original form--but smaller, since she has less mass to work with. Essentially, the Suika we are familiar with is a mini-Suika of the original! And that's why she's so tiny--she was literally cut down to a fraction of her former size. *sniff* Poor Suika

Of course, I haven't read all the canon sources. I haven't seen every ending of every game, or read every manga. But it makes sense. Comments?
(PS: The fact that vampires can turn into swarms of bats, and can regenerate from even one of those bats, possibly explains in a similar fashion where Flandre's clones in Four of a Kind come from. All she has to do is turn into bats, then regenerate from a single bat four times. Theoretically Remilia could do the same thing too. Why doesn't she? It probably does some strange things to your sense of identity, or requires a warped self-conception to start with. Flandre might be able to do it only because she is crazy.)