I'm gonna assume you're new.

The seal's a monster and you're expected to function as a living battery to let it undergo puberty. In exchange, it will fight and protect you. Basic contract stuff, you should still have your soul, if you had one to begin with and it came with you here, which I am irritatingly unable to prove.

So, yeah, you're not hallucinating the monster, and this place gives me a headache too.