I actually cannot rewatch TFWID because DAVID DUCHOVNY SHOULD NOT BE ALLOWED TO CRY ON CAMERA. EVER. EVER. YOU LOOK LIKE AN IDIOT, DAVID, I'M TELLING YOU THIS BECAUSE I LOVE YOU.
I feel like the episode might be more watchable if not for that.

I love Musings of a CSM! I love that he's a totally failed writer, that he really, really wants to be something other than a murderous creeper and failsfailsfails. Also, I think Chris Owens's acting as young CSM is excellent.

I'm unclear on which of the occurances in the episode are "real" and which are "shit Frohike made up based on reading CSM's bad Gary Stu fanfic."

I don't think we do ever truly fear him again...but I think he gets more interesting and tragic from this point forward. I'm very into the fall-of-the-house-of-Mulder angle of the mytharc, though. (Maybe he gets scary towards the end of this season--there's a very specific power he holds that is worrysome. But there's so much going on by then, he's not the center of it.)

Are there any X-files episodes where people with mental illnesses aren't dangerous and crazy?

No. Wait, let me think about that. No. Also, mutants are all evil, except when they just want to be loved, and then it's okay that they're rapists. Hey, you haven't gotten to those episodes yet, huh? They're funtiems.