Upon reading the story I quickly tried to incorporate a video game synopsis with the same content.
Similar to the original Grimm tale, the Fisherman and his Wife are both poor and live in a small shack. However, in my take on the story - when the Fisherman catches the fish prince and his wife makes her first wish the fish obtains power over the wife.
After the Fish grants the wife the power to be King - she wants more and wishes to become "Pope". Once she does, this becomes her predominant form throughout the game. As you play through, you can see her dark tendencies showing through - but she has no controlled because she is possessed.
As the fish continues to gain power from the Wife making wishes, it begins to change form as well. Upon the wife reaching her ultimate power you must fight her and in the game you are meant to lose. During the boss cut scene - you are in a daze and she convinces you to go back to the fish to become God. You wake up at the Fish's lake and he comes out of the water his giant, final form. He gives you the proposition - if you fight him and win, everything will return to normal, but if you are to lose, he will return to his human form and take his wife as his and rule everything as Gods. You accept the challenge and defeat the fish and everything returns to normal. When you return to your wife, she is laying unconscious and as she regains consciousness, she has very little recollection of what happens and she just says "I'm sorry". The game ends without you knowing if you told your wife what you had to go through.