First you have to know that a LOT of these things are just still mysteries and are unexplained in the game for reason, as I've heard a lot of these thing will be explained in a sequel IF the sequel will be made.
1) The spirit came from the rocks hat destroyed the flying city, in the intro where you saw that boy on the bridge getting destroyed. Or so that's how far I've heard and thoguht.
2) You have to see the intro, click Naija in the crystal on the title screen aaaand stop skipping intros with game, most of them are awesome. :p
3) The baby is of course of Naija and Li and you also see a little girl and a boy with the flying boat ship, we knnow that the boy is indeed Naija's son and is called Lucien.
4) I think she just means the earth, seeing she can control the waters, but not the eart, so all the land is what she means, at least that's what I think... And ofcourse the flying islands.