But one thing very very interesting that is never answered: Why does Nagisa even know about this story? We know that Tomoya sees these scenes in his dreams (as is implied by the scenes playing once the days end), but where does Nagisa see them? Tomoya tried so hard to figure this thing out, and came out empty-handed. Could it have been one of Nagisa’s dreams, just like Tomoya? This, more than anything, implies Nagisa having a connection to Tomoya stronger than that of a loving relationship.
Spoilers for just about everything, including the final episode of side stories:
I think that Nagisa saw the story whenever Akio brought her to the clearing. I think most people here accept that Akio bringing Nagisa to the place caused her to gain some sort of link with the town. I believe that when she was there, before she woke up, she saw the story from the girl’s perspective. The illusionary world already seems to be fairly disconnected chronologically from the real world as evidenced by the girl sending the junk doll/Tomoya back at the end of After Story’s first end. So my theory from here on out is a loosely cobbled together mess of things of read form other posters on the After Story board as well as some ideas of my own. To go as chronologically as possible this is what I think happened:
Nagisa got sick with a severe but natural illness. The flu or something. She was about to die when Akio took her to the place. The spirit of the town, who is also the girl from the illusionary world shows Nagisa the story and forms a link with her, saving her life. As others already posted elsewhere this is likely why she gets sick around winter; because the town itself is weakened. Anyway, fast-forward to the start of the game. The spirit of the town forms a link with Tomoya to send him to mend Nagisa’s issues (her self consciousness, fear of unknown, etc). This is evidenced by the fact that we see the first part of the illusionary world (well technically its at the end, but the first one we see) immediately before Tomoya meets her. Tomoya has the first dream, and then the next morning he meets Nagisa. Fast forward again through Nagisa’s route and After Story, with some multiple-timeline shenanigans as outlined in Kotomi’s route, and we get to Ushio’s birth. The girl in the illusionary world calls the junk doll “dad” so we can assume Ushio is this girl. The stress of giving birth to Ushio plus her sickness is too strong for even the spirit of the town to keep Nagisa alive so she dies. After Tomoya gathers enough orbs of light (apparently he is connected to the versions of himself in all the other timelines) he can save Nagisa after being sent back by Ushio.
As for the reason the spirit of the town decided to become Ushio, I think this is because of her wish to see other places and meet people that we see in the last episode of side stories. This is the only reason I can come up with for why Ushio is the spirit of the town.
This might be better off on the After Story page, but it is about Nagisa’s character/past so it should work here.