There's no question, Nurarihyon has stepped up in weight class from the first season. I hope enough viewers stuck around to see it.
S2 is still heavy in flashback mode, as the entire episode is spent on the story of Nurarihyon and Princess Yo, in early 17th-Century Kyoto (and the next ep too, by the looks of the preview. It's a complicated story, weaving together the origins of Yura's Keikain family, the early days of the Night Parade of the Hundred Demons, and the story of the dreaded Kyoto demon Hagoromo-Gitsune (Noto Mamiko) whose unsealing provides the impetus for the modern-day plot development.
Kyoto is in political turmoil, with Hideyoshi Totoyomi dead and son Hideyori apparently an incompetent and fully under the sway of Hagoromo-Gitsune. Princess You (Kuwashima Houko) is a beautiful human with magical healing powers which her greedy father sells to the highest bidder. Her liver is coveted by every youkai in Kansai for it's great power, and it's the Keikain family, led by Hidemoto (Midorikawa Hikaru), that protects her. Nurarihyon - young and a real smooth operator - wants her too, but not for her liver. He's in love with her, and Keikain's barriers are nothing to him. But when Hagoromo's henchmen kidnap her, it appears Nurarihyon and Keikain will join forces to save her and seal the evil youkai.
This flashback is obviously intended to cast light on the current-day storyline. The plot implications are obvious, given that Yura's brother has come to tell her than Hagoromo-Gitsune has been unsealed and Rikuo has offered to go to Kyoto with Yura. But the personal implications are important, too. You have Yuki-onna's mother Setsura obviously in love with Nurarihyon, as Tsurara is with Rikuo. And you have the human girl who's captured his eye, much to Yuki-onna's chagrin.
Indeed, when Nurarihyon kidnapped You-hime for a night on the town with his crew, it was impossible not to think of Night Rikuo's evening with Kana, taking her to the youkai hangout and showing her how the other half lives. The relationship flags certainly point to Kana based on that, which is not great news if you (like me) happen to be a big fan of Yuki-onna. Nevertheless, it was a fascinating thing to watch and I love the way these long-ago events cast big shadows on the present day.
My only real concern here is with pacing - ironic, as the pacing feels so much better than the first season. After next week it looks like 60% of the season will have been spent on flashbacks. With the Kyoto Arc reportedly as long and epic as it is, that doesn't leave much time, and given that this show doesn't appear to be a big DVD/BD or ratings success I kind of doubt we'll be getting a third season.