I just finished it and watched the full ending even after the credits and im a little confused on wtf happened. thx :]

The fate of Polka is to sacrifice herself again and again till she can light the world with her aura, but that never happen. That's why she become younger and that the old women living in front of the cello tree know her.

On his side Frederic believe that the world is coming directly from his imagination. with his death in the real world, he no longer have any attachment with the reality and he can now fully live in his dream.

With that liberty he try call polka and tell her that her task is not complete. She listen at him and she return to her friends. Once reunited she finally light the dark mountain with her aura and return some beauty to this world.

that's the general understandings