Yes, MC and Grace have a talk and she tells him her sad story. To say more would be a spoiler.
This IS a rewrite and not just a version update so the story has changed as I understand it. I think I will have a go at the original version now that I have played the rewrite just to see the difference. If you are looking for the fap material, you may wish to wait for now but if you like great story telling I highly recommend the rewrite as is. There are some strategic bits of nudity, one sweet kissing scene and a BJ in a scenic little pond.
The character renders have vastly improved over the images I saw from the original version. I'm pretty sure the dev developed some greater skills with both story writing and image rendering so they decided to start over. I'm not a fan of having to start over but I do prefer that if it's going to happen then do it and be done with it. That seems to be what has happened here... Dev was looking back on their creation thus far in light of newly developed skills and said, "I can do better than this." I love the look of the rewrite and the story is well told. I'm not a huge fan of the horror genre but those elements have been incorporated rather well thus far AFAIC. YMMV. As I said, I will be playing the original version next to see if any of my opinions change but at present, I give this rewrite two thumbs up with a hearty endorsement.
Hope this helps you, my friend. Adventure ever on, Phat