@xElleroche I can help: First, we have an egotistical Painter (let's call him 'Hugh,' like 'hue),' who, due to a war injury (see his medals) walks with a limp. Second, we have an equally egotistical Musician (let's call her 'Leila).' We also have a daughter. I forgot what name I gave her in my playthrough, but here let's call her 'Claire.' Clear? Hugh and Leila meet we they're both attending high-society art events as successful artists in their fields. Hugh asks Leila for her hand in marriage. She says 'yes,' and they move into a mansion that has an elevator so Hugh can get around. Some time later, Leila is pregnant, and she starts going to a newly-opened department store to shop for things for the baby, as Hugh says, even before it's born and they know whether it's a girl or a boy.
Things are going great, and they're even working off each other's energies in the same room. Hugh earns high praise for a masterwork based n Leila, 'Lady In Black.' Leila has become a highly-acclaimed pianist despite her... difficult personality. She boasts her blessings (see the letter in the basement when you fall in). Claire is born, and for awhile things are perfect. And then a fire breaks out at the department store while Leila is there, and she is badly burned.
Despite doctors' best efforts, Leila's face cannot be fully-restored, and her hands are in bad shape too. Hugh prevents her from practising with the violin or piano thinking she should heal up first, but she wants to get her muscle memory back. Hugh's art has also taken a hit, with his most powerful muse injured: he has a hard time seeing past the ugliness that he sees everywhere in the world, and fear of possible fires turns more toward paranoia as he starts to see rats in places he didn't before. As the stress builds he starts taking it out on doctors, pest control, and he even gets into shouting matches with Leila in front of a growing Claire. He obsesses over trying to bring back Leila's beauty that was in 'Lady In Black,' all while turning out worse and worse art, like that empty smile painting and 'Babyface,' for which he was highly criticized.
As Claire grows, Hugh and Leila put increasing pressure on her to succeed in their fields (a report card in the basement in the prologue shows her marks in music and art are high, but everywhere else they're poor). Claire starts hiding in closets, especially when her parents start yelling at each other. The big dog her father gets 'so she wont be lonely' doesn't help, as Claire is frightened of it. Nor does it help that Hugh gets frustrated with it.
Leila grows more frustrated and depressed, obsessed with making Claire succeed, but also with comparing herself to 'Lady In Black.' Finally she decides to burn the painting, and the house catches fire. Leila is burned even worse than the first time. Skin grafts don't work this time, and she is in constant pain. Looking at Claire reminds her of her failures. She can't stop the shouting matches with Hugh. She decides to commit suicide in the bathroom.
Around this time, a neighbour also calls the police in response to all the noise from the house. Child services gets involved, and they take Claire away, fearing all the abuse her parents seem to be doing her. Hugh becomes obsessed with getting her back, and his temper and impatience gets the best of him. An article in one of the locked cupboards in the hall before the bathroom with the baby that Mariel skipped in Part 1 shows that Hugh went to the orphanage and tried to take Claire back. He was arrested, shouting and crying that she was the only thing he had left.
Which left Hugh alone in a empty, partly-burned out mansion, infested with imaginary rats and bad memories of his injured wife and frightened daughter. He resolved to get back what was lost: his art; his family.
Now, where the established narrative and my theory diverge is in the question of how much we see going on is real, and which is in his head: It seems from the changing house and the apparitions of Leila and Claire in the house that Hugh has gone quite insane. So my theory, backed by a letter from Hugh's publisher friend outlining a story where a child goes into the mountains and has to kill a man, only to find out later that it was all in his head and he was in an insane asylum the whole time, I think this was Hugh's subconscious telling him were he really was: In an asylum. And the loops of failure that result in painting Burned Leila over and over again (even though all the paintings looks different and perfectly fine if you go back into the painting room after the cutscene) is Hugh going over the situation again and again, trying to recapture what was lost.
Additionally, I theorize that the Painter Ending is just another loop of failure that wraps back to the start of the game again, because this 'ending' has Hugh regain some fame, but not his family. The ending is not all that satisfactory. But the Mother Ending does finally bring Hugh's story to a close...