1) With a lot of grumbling and displeasure, Santa will indeed confirm that he is referring to the Story Eater. He'll even recognize Luca as someone who had come from the Story Realm, thank him and the others for their hard work and even ask how they've been adjusting.

2) Santa will reassure Luca that the Storyteller has been maintaining a strong defense back in the Realm of Stories and has been able to maintain and gain strength thanks to the hard work they accomplished in previous years. More stories are being restored and the Story Eater's influence there has lessened, but not gone completely.