I had some time, so I went ahead and read this. All in all, it doesn't necessarily strike me as profound—the premise is pretty cliché, and Rarity here is "in name only". Granted, I respect that you're trying to give her a darker, subversive backstory than what was presented in the show, but even then, it's not exactly easy to rectify your Rarity and show. For example, you've given her like demigod-level cursed powers that come at a high price and a lot of other odd things in the spoiler section (which I read last, despite it being the top of the document); that doesn't really mesh with the vain, vapid pony who really, really seems like she's come from a privileged background.
So, it's not really that your Rarity is out of character, but it's more that the character you've written her as is completely different than the one in the show. You chose to write this as MLP fanfiction, and that's fair enough, but this story could have been original fiction without too much additional work (and see? I daisy chain conjunctions too, sometimes; it's a bad habit). That's not a critique, per se, just an observation.
I'll give you that the setting / culture of the Eskimo ponies is fairly interesting. That part of the story is what I enjoyed the most, since it was where your worldbuilding felt the most concrete. Later on, with the volcano (?) beneath the lake, or the fox demon (which, I swear I read something by you that had another fox as a main character, only it was a cupcake), everything seemed shallower, and less developed—even though we were seeing things through the eyes of a child. Part of it, I think, is that your action seems to be detached from the narration; another is that, comparatively, much more happens in the last third of this story than in the first two thirds.
From a writing perspective, I think the best thing you can do is to simplify your sentences. Complex sentences only work well when they add meaning to your story;