I highly recommend that you read the light novels for Scrapped Princess. They will explain a great deal that is hinted at in the anime and manga. The novels can be found at your local bookstore. I think the third one is currently released in the States.

The whole Shannon/Pacifica thing? Pure sibling love. Pacifica might have a crush on her brother. He's been the only stable male in her life for a long time. It's really just confusion and she gets over it, in the anime. Haven't finished reading the novels yet.

The truth about the prophecy is revealed, from my understanding.