My take on the story as a whole after playing through all the games too many times and reading all the guides:
The Dark Soul setup:
The 4 flames are eternal and will manifest in different ways depending on the times.
- The Dark Soul - Manifests as humanity, is a constant within humans
- The Dead Soul - Manifests as death, all things die and wither away
- The Life Soul - Manifests as pure chaos, is represented in fire
- The Light Soul - Manifests as Order, is represented in miracles and monarchs.
The first three work together and are unique, the Dark Flame can work alone or even in opposition to them. All humans die, but the hallow defy death, hexes use emotion to defy the order of miracles, and the power of humanity can directly influence fire and pyromancy.
Each of the original four Souls/Flames grows when it is suppressed and wanes when it is allowed to flourish. This creates a balance between all four.
Ex1: Gwyn needed to sacrifice himself and countless undead to continue his rule, the King's soul waned, but as others flurished he required them to be sacrificed to his own. Despite all of the undead who sacrificed themselves the flame was still fading.
Ex2: Drangliec is described as a dead land, despite being ruled over by the Dark Soul. All of the other souls must be gathered in order rule the kingdom. The abyss which was an all encompassing blackness in DkS1, is nothing more than caverns in DkS2, and the abyss is known to be directly linked to humanity and the Dark Soul.
Lordran is Draeglic:
The land is timeless and forever. Every ending happens in the official story. New kingdoms rise and fall through eternity. It is separate from the rest of the world, but known to everyone.
Grave Warden Agdayne directly confirms that it is the same land. He even mentions how the "Curse of Humanity" was a silly thought believed by the ancients.
The Main Story - I'm going to go backwards, it is easier to explain.
Ruling as the Next Monarch:
The game flat out says that any decision you make will not matter, as no matter how you rule your power and the land will fade, only to rise anew in the future. You get no choice in the end as your choice won't matter in the long run.
Taking the thrown:
The undead must defeat the current rulers to become the next Monarch. This means revealing the Queen's secret which only the Giants and King Vendrick know. Once she is defeated you can rule the kingdom and it will become whatever you desire, whichever flame you prefer.
Facing the Giants of the Past:
This part of the game is handled terribly, but it represents the brutality the giants attacked with. They wanted Nashaandra to die for what they stole, but she had convinced Vendrick to defend his kingdom from them, using their souls to power Golems. When you are given the Giant's Kinship, you are assumed to know Nashaandra's true secret, that she is Manus reborn. You actually don't, but she reveals this to you in a typical badguy monologue.(so wrong for souls)
The Dragon's Part:
The Ashen Mist let's you see memories. The dragon has staged Nashaandra's downfall, but they want the undead to know her secret to lure her out and defeat her. They created the Emerald Herald to guide the undead in hope of rising a new monarch. The Dragon's act in a similar way to the gods of DkS1, the Emerald Herald act as the Primordial Serpent, guiding the player so that they become powerful and prove themselves to be great.
Confronting Vendrick:
When he found out Nashaandra's true identity, he could not take it and condemned himself to death. Yet as an undead he could not die and instead is locked away a hollow. The war he caused with the giants because of his blind trust in Nashaandra and all the death and ruin to his Kingdom it caused was too much guilt.
Becoming a Great Soul:
You are tasked with gathering the Ancient Souls of 4 beings. Who the souls originally belonged to is incredible, the Lost Sinner being controlled by some form of the Witch of Izilith, but story wise it's not important. The undead must grow powerful, either through conquering those ancient souls or by conquering many lesser souls. Once this is done the Shrine of Winter opens and leads them on to the path of rulership.
Entering Draeglic:
The Dragons, Emerald Herald, and Fire Keepers make natural allies. The land they live in needs to reborn yet again. They all benefit from keeping the abyss at bay and they all rely on the immortal undead to accomplish what they cannot. A soul that fights the urge to go hollow and returns time and time again to face the enemy is the only thing that can conquer Nashaandra, as it was proven in the past many times over.
The Prologue:
The undead loses his memories of family. Yet before he goes completely hollow he is given a mission. A mission to venture into an ever lasting ancient land. This mission rings out in their mind, as they lose their memory and continue to rise from the dead, they remember being told of the place where souls reside, where power and sanity can be found, and where turning hollow can be put off forever.
That's my take on the story.
Lots of other bits and pieces with the world in general, like which lands turned into what and where the great souls currently reside. Those topics are probably best for other posts though.