As soon as you enter the area you'll notice a two-tailed cat harassing a little blue spirit. You intervene on behalf of the spirit, but Nekomata objects. She claims that the spirit is for her to play with! What does a human know! Nekomata collects her blue plaything and leaves for the other side of the Stream.
The well being of the poor spirit is something to be worried about, so head back to the Rapids to talk with Tree Spirit. He did say to come visit when there's something bothering you.
Explain the problem with Nekomata and the spirit to Tree Spirit. It seems that the kitty is fond of causing michief so the tree isn't worried until you express concern over the tormented spirit. The tree thinks about it for a while, and then suggests that you collect some adzuki beans, a fish, and a red cloth.
Any fish you want to use will be fine, but the other two items you'll have to hunt down. After you have collected the three items, take them directly back to Nekomata.
The adzuki beans obviously come from the goblin bean washer you had just met. Venture back to the Waterfall during the morning or night hours and talk to the washer. He's not willing to easily give up the beans he's grown!
On the other hand, you did help him wash his azuki beans. The goblin decides to hand over some beans but only if you can bring him 5 Seema fish. Any size will do and the fish can be found in the waters of the Waterfall or Mountain Stream.
Bring the 5 Seema back to the goblin and hand them over. He's willing to give you some beans, but they're all dirty! You'll have to play the bean washing mini game again in order to satisfy his need for cleanliness. Once you have cleaned his beans again the goblin will give you some of your own. Even if you fail at washing the adzuki you will still get some.
Walk into your house and Ayaha will announce that she's come for a visit. Since you're always out fishing she figures Yunna must be lonely. She was going to bring her a Bellflower but asks if you could do it for her. You can find the flower in the Pond area. Bring the Bellflower back to Ahaya and she'll have you put it next to your sleeping sister.
Ahaya remembers how you were searching for a Red Cloth and hands you her Red Handkerchief! She also gives you a Lunch Box.
Bring the bundle of goodies you've collected to Nekomata, who will be hanging out on the western side of the water. Somehow the combination of the 3 gifts cause her to dance uncontrollably. Nekomata says a few magic words and returns the spirit. She claims she was only playing with it, and dances out of sight.
Tenma, the little blue spirit, wants to thank you for rescuing him and joins your party. If you want to use Tenma you'll have to return home and swap pets.
If you return to your house to swap pets you'll find the beany goblin inside Yunna's room! He decided to come for a visit and wanted to share his beans with your sister. Goblin also believes catching the River King will be of great help to cure your sister and gives you a Chum.
Go back to visit Tree Spirit and you'll find a Kappa swimming in the water near the big tree. Kappa tells you that there is more river to the north, but there are rugged rocks and worn-out trees. It's a dangerous place to go! He'd much rather prefer to stay in the Rapids area. If you really want to go though, he is willing to take you. You will need to bring him a Cucumber first!
Walk to the west side of the water and talk to the pot-hat boy named Yasu. He will be willing to give you one of his snacky Cucumbers but you have to bring him a Ishikawa Salmon fish first. The medium sized fish can be found in the southern area of the Mountain Stream, or in the middle of the Waterfall area, near the large rocks. It is easier to find Ishikawa Salmon in the Mountain Stream area.
Bring the fish (any size) back to Yasu and he will exchange a Cucumber for it. Take the vegetable back to Kappa.
Kappa is very happy that you've brought him his favorite vegetable. He's willing to take you up the river now, but you have to climb on his back. It takes a little while, but Kappa eventually gets you up the river and then makes his way back downstream.
After Kappa leaves, you notice a small path leading south which ends up taking your directly back to the Mountain Stream! All that work for Kappa and you could of just walked there the whole time...