Then the Demon King said fiercely, "Beauty, with you before me I dare conceal nothing."

發狠 marks the change of manner: the soothing is over. 相 is xiāng, the each-other reading, in 相瞞 — to keep a thing from one another.

"That Banana-Leaf Cave is out of the way, it is true, but it is quiet and free."

His first move is to defend the other household's respectability, which is not at all what a man being accused of uxoriousness would be expected to say to the woman accusing him.

"My mountain wife has practised austerities from her youth and is herself a female immortal who has attained the Way. Her household is strictly kept: within it there is not a child of one chǐ. How should there be a man with a thunder-god's beak for her to depute?"

山妻 — mountain wife — is the humble form a man uses of his own wife. 得道 takes dé, attainment, and 焉得 takes dé again in its rhetorical sense of "how could there possibly be." 男子 is zǐ, the full meaning-bearing syllable, not a swallowed suffix. A 尺 is a length measure of roughly thirty centimetres, so 一尺之童 — not one child of a single chǐ — is a figurative way of saying there is no male in the house at all.

"This must be some fiend from I know not where, who has perhaps taken the name falsely and come here to seek me out. Let me go out and take a look."

那裡 is a question here — from where — so 那 is nǎ, against the pointing nà of 正在那裡 four passages back. 綽 is chuò: 康熙 licenses only 昌約切 for this character, and the sense is that of 綽號, a nickname worn rather than owned. The chāo of 綽下大路 is a separate colloquial borrowing — and, as it happens, the reading this same character takes at the very end of the chapter, when he snatches up a pair of swords.