Suwako is the extra boss of Mountain of Faith and technically a goddess at the Moriya Shrine—though she's quick to clarify that it's not really hers anymore. She lost control to Kanako after being defeated by her and willingly stepped back.
Her real story goes way back. In ancient times, Suwako ruled a small kingdom and had the rare ability to control the Mishaguji, curse gods that accumulated massive amounts of faith by cursing everything from births and harvests to armies. When Yamato gods showed up with plans to unify all the kingdoms into what would become Japan, Suwako fought back with the best steel weapons available. But Kanako simply held out a thin vine, and Suwako's entire arsenal instantly rusted to nothing. The gap in their divine power became obvious, and Suwako accepted defeat gracefully, surrendering her kingdom. Centuries later, it turned out her only direct descendant was Sanae—a detail Sanae herself didn't learn until the events of Subterranean Animism.
Speaking of which, Suwako shows up in that game during Reimu and Yukari's scenario, revealing that Kanako's been secretly running an industrial project in hell. Reimu obviously wasn't thrilled about getting dragged into the Hell of Blazing Fires over it.
Content compiled by AnimeList.moe from publicly available sources.