You start the game in a battle with Chou-Chou alone against some enemies, but it's going to be very hard to actually be defeated, as their attacks do hardly any damage. All you have at your disposal are skills and a fairly large pool of MP, so feel free to use whatever you want to take out the enemies before you.
After the battle, some scenes will play out and you'll be thrown into a Castle battle. These play out pretty much the same as with the previous game, but if you haven't played that, read the tutorial carefully. These castle battles are similar to Rock-Paper-Scissors, where certain attacks work against certain actions. You will need to pay attention to comments coming from both Ryuto and the enemy to help you choose your next action.
Considering that you outmatch the Etherwind by a lot, it might be best to just pick Pierce over and over to finish the battle quickly. Some more scenes will occur, then you'll be in control of a character named Nao. Straight ahead is a save crystal, as well as a chest, which contains a WARDING POWDER, BRAISED TOFU and OUNCE O' SOUP. Just continue to the marker on your map to view an event, throwing you into a battle.
You're introduced to crystals with this battle, and there is both a good and bad one here (there is no field effect crystal). It's best to keep yourself close to the HP regen one, allowing yourself to recover from the enemy attacks until you take out the doll. Once you do, relocate to the Physical Up crystal to take out the other enemy, since it will likely recover more HP than you can outdamage. After the battle, continue to the next event and watch the cutscenes.
A battle will eventually happen, but it's just Chou-Chou beating you down, which is supposed to take place. Some unfortunate events happen, with Chou-Chou being drained of her powers and shrunken down as well. There will be even more cutscenes, bringing this chapter to a close.