Inner Dialogue?

The end of part two left me pretty dazed and confused. At first, the section with no punctuation reminded me, unfortunately, of Beloved. The first time I read the passage, I thought Quentin was using lower case "i" to show his low self worth. I considered it a representation of his suicidal tendencies, but when I read it a second time I realized the conversation taking place. Once again, Quentin's thoughts return to the idea of incest and his love for Caddy. The "he", to me, refers to his father. In the scene Quentin is reflecting on a conversation he had with his father about Caddy, the past, and the future. However, I still have a few questions about the passage.

What exactly did we learn about Quentin's relationship with "he"? For that matter, who exactly is he? Lastly, why is Quentin reflecting on this now?