The Hollow is cool, but Ash Lake is fucking beautiful. Wait'll you see it. Same thing with the endgame Kiln area. Some of the most beautiful, haunting environments in any game ever. And you'd be correct - both the Flame and Chaos Flame Embers go to the Catacombs blacksmith.
And I have a Lightning katana-type now. It's better than the Estoc, but each swing uses more stamina. I think I might use it when I try to pick apart the endboss.
And at the level I was at when I went back to the Demon Ruins for realsies, I just hit the Capra Demons three times with my Divine Lucerne and they crumbled.
Make sure to get to the second level of the Chaos covenant AS FAST AS YOU CAN. There's an important guy might die if you don't.