I think it's interesting that Sabi can "dream" without actually sleeping. I think maybe she's an online friend of Madotsuki. Madotsuki doesn't have a computer, but maybe she used to, and Sabi has embarked on a quest to find her the only way she knows how, by hacking into the WIRED.
How do I figure Sabi knows Madotsuki? Well, she shares lots of effects with Mado. You get the witch effect from a character resembling Witch!Madotsuki, and (I admit this is really reaching) her house vaguely vaguely VAGUeLY resembles Madotsuki's room… Almost as if Sabi pieced it together from descriptions, or blurry webcam photos taken within the room.
Sabi is a computer hacker, hackers often enjoy exploring abandoned buildings (don't ask me why but those two seem to go together) which is why there's all these rusty, run down areas.
>tl;dr: Sabi is an online friend of Madotsuki, Madotsuki has disappeared from the internet, and Sabi is trying to find her. Thoughts?
Kaibutsu are trolls, determined to lead her astray on the search for her dearest Madotsuki.
Maybe the red demons represent a truth she wishes to deny.