zingfharn

Yeah, I had the same issues. The only thing I can think (stick with me here) is that Father Balder (Baldur?) created young Cereza to get Bayonetta to come to the tower, and in doing so, some of Bayonetta's life force/power/whatever actually transferred to Cereza, which is why he absorbs her for the fight.   
After all, he sends her those 'my dear child, I am watching over you' messages all the time, so he's got to know what they're up to. He also says something about creating her to get Bayonetta to the tower, although that's quite far into the cutscene, and I can't be bothered to watch it again.
It's also possible that Cereza was simply part of the father in the first place, so he's putting her back to regain his full power (although that's a very creepy thought).
 
And, to be honest, I totally missed the bit where her pendant blocked a dagger. So you can probably ignore me.