Now that this is out there, I'm more than happy to still post the Halloween Party at the end of the month if anyone is interested. I'll be using it as a sandbox/meme type situation myself, so!
You beat up the demon and travel to a literal ghost town called Portview. Staying there for too long will cause a person to temporarily become intangible and able to walk through walls.
It turns out that the demon blocked the tunnel a long time ago, and the conductor had to decide between ramming the blockade or putting on the brakes. He chose the latter, and the train derailed. The demon trapped all the souls that were approaching on the doom train. Defeating Karuto released the souls and the cycle has gone back to normal.