Okay...*phew*...here goes.
This is a bit different than in SH, but in SH2, the waterfront vacation town of Silent Hill is basically hell. Your own sins are given form, your own guilt comes crawling after you, forcing you to accept it.
James and Laura both enter Silent Hill and are forced to confront their own demons. Instead of a subquest featuring Maria, it would've been more interesting to see a subquest with Laura, because she is a human character just like James. She's dealing with something FAR more troubling than he is, though. She is eff'd up.
Maria was created to torture James, to make him care for somebody he obviously couldn't help. Notice that for much of the game, Maria is either IN danger or just outside of James' reach. Or dying, or all three! As for Laura, I think she's so far outside of sanity at this point that she sees James as a threat, as just another creature in this horrible hellscape, while James idenitifies with her on a human level. They're kind of in this together. I still don't understand, however, where Eddie fits into this. His agenda is never clear, his reason for coming to Silent Hill...
Of course Pyramid Head represents James' violent tendancies, perhaps the very act of killing his own wife. But the Pyramid Head is also sexually violent, and notice that at least one enemy in the game (Mannequin) is female. I take this to mean that James is sexually frustrated, but I could be reading to far into it.
What's Laura in there for? Well, it's telling that the official name for the boss monster attacking her is "Abstract Daddy..."
Hope that helps, sir. I HIGHLY recommend SH3, although you need to know what all went down in SH first.