Yes, Souhaku is inside of Souichirou, even though the latter knows nothing about it. Souhaku and Aya have made some kind of a deal regarding this. Souhaku has probably changed quite a few bodies in his time. Remember the corpses in the cave under his mansion? Those are his old bodies.
The current head of Shoujou (Shoujou Mitsuiro) must be a descendant of Shoujou Tokuan's relative (like a brother or a nephew), or else Tokuan had children before his body was stolen by Souhaku.
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