Do you listen to yourself? You sound like a network censor. At the end of the day, no narrative element is "necessary".
But fine, I'll address your point anyways. Possessing villagers would NOT have had the same effect, as in a world of magic, alchemy, and pure bullshit, there is always the hope of reversal so long as their bodies and (assumedly) their souls remain. Possession would have reframed Mireille's and Risette's entire goal going forward to one of undoing their mistakes, rather than being forced to live with them day to day for the rest of their lives.
Showing children being victim to all this might feel extreme, it's supposed to. It drives the point home that the situation is beyond fucked to even some of the most callous or jaded players who wouldn't bat an eye at a faceless adult NPC getting eaten.
Furthermore, Risette and the other homunculi primarily fed on blood as the most basic genetic material. This is actually rooted in actual alchemic folklore, that homunculi would be nourished by human blood for an extended period of time. Knowing that, a self taught alchemist accidentally creating a homunculus and knowing not how to nourish it could ONLY lead to a situation like this. Or getting caught by the townspeople before it's too late and the both of them getting lynched.
There's nothing wrong with dark stories in granblue, they're fun.