I am very lost on how to progress to any "good" ending. I obtained the rusty key, and 2 mystery words for the book, but there seems to be nothing else to interact with other than loosing.
Thank you for the feedback on where you're stuck; I'll describe in more detail as this paragraph goes on if you want to get back to it (I can't find a spoiler tag). The answer is in the book, and is a three part spell. The one you need to obtain is in the toolbox in the shed, and goes along with a word related to the fairies and a word to make the spell permanent.
The actual spell words you need to go with are Aturns, Fau, and Retru. The conceptual spell is that you are reverting the fae magic that has rusted over the key. If you instead do Tempus - Fau - Retru, it only temporarily fixes the key. Thank you again for the feedback, as the spellbook was where I expected the most confusion.