Spoiler - Cause of girl's problem
It just seemed so obvious that the mother was the truly unloving and evil presence in the girl's life, and that the young priest fed into the mother's fanatical religiosity. Having received the rosary from her mother, Michaela was later unable to "touch" it because she subconsciously realized the "devil herself" had given it to her. Likewise with the incident at Midnight Mass. After all, the mother (just as hung-up on her daughter's blossoming sexuality as the mother character in "Carrie" -- remember the line "First comes the blood, then comes the sin.") -- had just thrown out the adorable fashionable clothing her daughter had bought in Tubingen because it made her look like an attractive young woman, not a shapeless farmgirl.
That being said, the initial unsaid problem within this very sick family was well-conveyed in quieter moments at the beginning. Why no one, including the world-weary older pastor, could not see the obvious family breakdown puzzles me. Perhaps that would have been what a psychiatrist in Tubingen might have discerned had the protagonist sought treatment. Unlike the _Emily Rose_ flick, where the antagonist seemed to be a real demon, in this one, the antagonist was the mother.