It seems that the version number on Innershade download page indicates version 9.5 instead of 10.0 (download link redirects correctly to v10.0). Also, v10.0 archive seems to be missing in Dropbox repository.
Hmm, I have no idea why that would happen, it's been like... 10 years since the release? One thing comes to my mind... try changing his animation from boy to any other animation.
I think that I once heard that some versions of the game blocked killing some animations - children, to be more precise. Not sure if that has anything to do with local law or what and I am not even sure if that's true!
As for disappearing: during that fight enemy divides itself into different creatures. You are supposed to find them on that area and kill them. Once all those "nightmare parts" are killed, a new version of the enemy appears and the battle continues. Perhaps it's that moment when you should find them? Check the area.
No, the nightmares are not the issue. It can be reproduced in any area by just creating creatures of 9XE-type. For example: create 9XE1, dialogue starts, spells are cast; create next 9XE1, dialogue starts, no spells (local variable is already set); create next 9XE1 dialogue starts, creature disappears. I tested this behavior 5 times (well only with 9XE1,2 and 3) but it doesn't matter in which order they are created or if I kill one of the previous ones or not.
I finished the quest no matter, because I can CLUA the creatures afterwards. Only issue is that I have to adjust the main variable via CLUA.
And don't mind. I don't think that your mod is the issue. I suspect that just the large number of mods might be an issue or a specific mod that is altering effects (somewhere else) or a hick-up of a script during the conversion process of EET_end. Who knows...
Ideally, you should start from before entering that area, with child sprite changed to anything else, and then trying to do the quest without the console, so we knew nothing got messed up when you tried to fix it with console, but perhaps ignore it for now and I'll try to check it on the latest patch.
I kinda hope up it's not just my mods you're having problems with... huh... Anyway, I hope you're still having fun.