So you have the Priest who draws and the Rabbit named Koto who came to life. They had 3 kids, but all 3 came about from other drawings the Priest created and Koto/the god/etc granted life to. After Koto's time was up, she returned to being a drawing and occasionally manifesting herself as a black wandering rabbit spirit thing and the Priest returned to his own world which went from like a classic edo time period, to some weird Futuristic time period where they travel worlds and have spirits and shit which they could have had originally, but it wasn't shown in the early moments of the Priest's backstory.
All the while, the 3 drawing kids stayed in the mirror capital, grew to adults and etc. But the priest may/may not have aged (it's really uncertain, you don't see his face at the beginning of episode 1).
And then there's the young Koto, who it seems like she was not drawn but actually born and her parents are Rabbit Koto and the Priest. At least, that's the speculation/feel I have so far. And she was raised by the fox sensei who is actually the priest who is actually her biological father (as suspected). And then at a certain age, she managed to get to the Mirror capital where she meets her older brother who is the youngest of the 3 that stayed behind and that's pretty much where episode 2 ended.
That sound about right?