The Mermaid Princess chapter features some underwater imagery (e.g. closeups of a fishtank, and fish swimming around in mid-air) but does not literally take place underwater.
The main characters are all orphans, so there are no blood relative parents. However, parental figures, such as the head of the orphanage, are abusive.
Near the start of the game you find a dog bound and hanging from the ceiling, but you rescue him. There's a cutscene where a rat is tied to a stick and pushed into a girl's face to torment her, it's later seen dead and still tied to it. There's a chapter about a dead rabbit. Part of the story is that a girl's puppy was abducted and killed by a group of bullies.
We see shredded plush dogs throughout the chapter 'The Funeral'. In context, they're meant to indicate the death of an actual dog. However, there is a theory that Brown wasn't an actual dog but a plush toy. Make of it what you will.
The game is about a character remembering past events involving dead people, physically going through the memories while she is older, and they remain the same age. If this counts as ghosts is up to you.
As an autistic, both depictions are fine to me. I've seen some people upset about Thomas liking trains, but it seems like the intent was to counteract the other children being interested in airships instead.
Some interpret the character Eleanor as being autistic or otherwise neurodivergent, as she's depicted as acting in an odd, cold way. One chapter ("Bird of Happiness") focuses on Eleanor, where Diana and Meg steal her beloved bird, wrap it in her dress, and lock it inside three boxes knowing that it'd asphyxiate. They go out of their way to state their dislike of her, as well as bet on her reaction to her bird's death. There is another coded character, Thomas, but he's a relatively minor character.
One of the characters, Gregory M. Wilson, is a depressed man who has lost his son. It's established that he would often contemplate suicide by gun. He is the final boss, and he does ultimately die that way after committing a massacre. It's also implied the eldest orphan, Clara, is suicidally depressed as a result of sexual abuse. Her boss fight form 'The Mermaid Princess' has 'gills' on her wrists, as well as stitches throughout her body, that are often interpreted as self-harm or suicide scars.
It's ultimately revealed that the game is actually an adult Jennifer looking back on her childhood in an orphanage, with the other characters being mental constructs of people she actually knew from that time period. We see things like bullying, physical and sexual abuse, animal cruelty, and even murder throughout the game. A few of the other children express trauma responses, such as Clara, the oldest girl who is heavily implied to be regularly sexually assaulted by Hoffman.
a man takes in the protagonist (a girl), thinking that she is his dead son. she is repeatedly referred to with masculine terms by both this man and the girl who rescues her. this continues a for a while until the protagonist tells this girl the truth. it's not major (she's referred to properly throughout most of the game), but it is present in some cutscenes and bits of text.
not necessarily jokes, but a fat girl is compared to a pig and is considered lesser than most of the other girls in the "red crayon aristocrat club". both of these may be because of her weight, but it is not directly stated as such.
A lot. However it's not explicitly shown, this includes an old man having a sexual relationship with a young girl, and that same old man very sexually caressing a girl all over.