It seems like Nancy was meant to be a more major character, as much as she was in this episode.
I can believe a lot of crazy things in this show, but Buffy being a counselor is really hard to swallow. One, she's completely unqualified, which is pointed out; two, she doesn't have a lot of patience with navel-gazing.
Spike seems as surprised as Xander that Buffy wants to go out alone with him. And what's with his shirt? I don't mean the color, which is deeply soulful.

The shirt seems too small for him, almost like a woman's shirt. Is it something he found in the high school while cutting and dyeing his hair? (And why can he do that, but not shower?)
Dawn has a definite arc this season of being "incredibly scary." It made me finally like her character.
Why is Spike reticent about telling about his soul? (I know, I know, for an awesome later scene.) But to speculate, does he think it makes him seem weak? That it didn't make any difference? That he feels even less worthy now? That he wants Buffy to guess from his altered behavior?
I originally thought something seemed really off about the bar fight between Spike and Anya and Buffy. Shutting Anya up would take only one punch (not that it was appropriate! Use your words.), and it seemed out of character for newly-souled Spike. But I thought of two reasons. One, Anya brings up a bad chain of associations. Sleeping with her led to his attempted apology, which led to the attempted rape. And of course, he has just been reminded of their encounter.
Secondly, it made me think of Buffy's beatdown of him in S6 when she attempts to turn herself in for Katrina's murder. As with Buffy, Spike is perhaps projecting his self-hatred of his own demon onto Anya.
That all would explain why Spike then encourages Buffy to beat him. His comment about her expression being "absolutely delicious" hearkens back to when he used the word to Riley, after he found them together. ("A word that I don't use often.") I think he is deliberately reminding Buffy of the mortification she felt then, and the fall-shy comparison that Spike now feels he represents. (Which is in huge contrast to how proud he was at the time.) Bringing up the vamp face would reinforce that.
The giant worm shows Anya's losing her touch. It may have been impressive, but it just made the boyfriend more dangerous, and didn't stop him harassing Nancy. Though Anya's thing is vengeance, not restraining orders, so maybe she wasn't concerned with that.
The final scene in the church was haunting and poetic. But others have spoken of it far better than I could. I enjoyed reading all the comments on it.