Reading this, it becomes very obvious how much Hollywood movies are inspired by these psychological phenomena. But they almost always try to leave the metaphysical element in, maybe even make it real, instead of debunking it. And so the culture of 'demons' persists among uneducated people, and there's no catharsis, and definitely no exorcism from the demons of our ignorance.
You ended with a Mark Twain quote, I'll end this with a pertinent Marilyn Manson lyric, that relates to Rita's housemate:
"fear of the Beast, is calling it near,
creating what we're hating,
it's only fear that is here".