I think this was pretty much the only kind of closure this show could have. After all, despite all the action and the techno taboo by the Third, and other such concrete things, this was more a philosophical and I guess emotional show than anything else. And it seemed to me Honoka was always looking for something not very close to earth. And she certainly found that.

The Observer wasn't going to blow up the planet. He had became sad, or filled with void, because humans had nearly destroyed the planet and their own limitless potential along with it. I doesn't make sense an entity that had become disappointed and saddaned by that would then finish the work, does it? I think Iks and Honoka only wanted the being to be able to leave Earth feeling something else than emptiness and sadness, and they succeeded.

I don't remember if the fairy was supposed to be gone already, but I think the connection could even simply be imagined to be a connection between the fairy and all living beings on Earth, since the fairy decided to take the hereditary material with her to take it to other worlds. At that moment Honoka certainly was a representative of the life on Earth.

I think this was a pretty good conclusion to the story. I was wondering how they are going to be able to end it all in one episode, but it felt quite balanced and not hurried at all. And like you said, it also tied many things together, in a way.