to clear up a few things:
Q: Where to continue the shopkeeper's event after the mountain one?
A: Go to the mountain hut, I'm not sure if you need all the "Another Dimension" items, but there should be two new treasure chest there. One of which contains a hypnotizing medicine and another is an item for you to break rocks.
Q: Who to use the hypnotizing medicine on?
A: You just need to possess it. Get on the pure ending and when you talk to the shopkeeper, she's already in an hypnotized state and will give you the password to the hidden portion of the game...which is mainly about how she ends up in that state.
Q: How to get to the fairy in the cave?
A: You need a key from Yutaka. I'm not sure what you need to do to get her to give you the key, but I pretty much complete the whole classmate recruitment and item delivery quest to get the hidden treasure on the top of the mountain and used the money to buy all the best equips in the game + Aya's voice since some of you mentioned about a battle. One thing for sure is I did not get into any battle and she just handed me the key on the last event in the hole. With that key, just head to the crystal mentioned and you should be able to dissolve it.
Q: What does the fairy do?
A: She will cast a magic on you, giving you the choice of Pure ending, normal ending or sex slave ending when you talked to the Sensei in your classroom. Speaking to the fairy again will prompt her to either remove the magic, or leave it as it is.
I attached a picture containing the password for those who needs it. If anyone wonders why it wasn't the fortune teller in the tent that is giving it, the fortune teller is just someone who gives the 'hint' to the password, not tell you. She will guide you to get the hypnotizing medicine and mentions that "When you are at your brightest(refering to the pure ending), there will be a shadow of darkness as well(refering to the shopkeeper who has already fallen)"