Sounds like you and Hollis are bonding just fine! Very happy to hear this. I enjoyed the pics and videos - Hollis a such a cutie! I've had two lories and yes, they are nippy, feisty birds. Almost the first thing each of them learned to say was "no biting" lol. But as you know, they are a ton of fun and have cute personalities and are very interactive.
Yeah, they don't really like to cuddle, but as long as you continue to handle them, they won't mind a quick cuddle now and then.
Using the cage as a punishment area can have problems when trying to get them to go back in their cage. I learned that with our first lory, it got so bad that I had to play with a toy inside his cage to trick him into going back in. With our current lory, I would reprimand her for biting by just telling her sternly "no biting". After a while I would say "ouch that hurts" in a hurt voice. She immediately responded by stopping her biting. And sometimes she would even say "sorry".
You've been successful in training Hollis not to bite, when she stops drawing blood. The occasional nipping will get less hurtful too, as you continue to build your bond with her and interact with her in a personal way... just as you interact with your young son, I've found that lories need that type of interaction in order to bond really well. They can read body language, can read expressions on your face, and can sense moods - all of this they can do extremely well and will react in kind.
If you can decipher some of the mumbling, and then say the word(s) very clearly, Hollis will improve what she's saying... I tried that with Sweet Pea and it worked almost instantly. I got Sweet Pea when she was just 6 weeks old, and she made the crying sound for a solid 6 months. I was in touch with the breeder who helped me wean her and told me the crying sound was normal. Now Sweet Pea is going to turn 16 years old this month... the time has flown and we love just as much as we did the day we got her. She's even learning new words too.