Just rewatched buffy s2e19 (the episode where the ghosts of the student and teacher love affair haunt sunnydale high) and oh boy I remember now why I loved it so much upon first watch.
The events take place at a time where Buffy has a unique perspective on the monster at hand. She is angry at Angelus for Jenny and angry at herself for Angelus. she very noticeably is displacing some of this anger onto James (the poltergeist guy student), and relates to the story of the tragic lovers. (weather she consciously relates to the teacher or student more could be argued)
First, some scoooby critical food for thought:
Buffy is the one to realize that what James wants is forgiveness. She tells the scoobies multiple times that he is a KILLER, who should not be forgiven. They are against her stance for whatever reason:
In the computer lab when they learn about the murder, Buffy states that she thinks James should've had to serve a life sentence (which I think most people would agree with) but Xander hits her with a "Yikes, the quality of mercy is not Buffy" implying that Buffy should for some reason be merciful?
Way later in the episode at Buffy's house (when she realises he needs forgiveness) Giles gently (imo condescendingly) lectures at her "To forgive is an act of compassion, Buffy. It's not done because people deserve it. Its done because they need it"
Xander, taking Giles' side "He can't live with it, Buff, hes dead."
Credit to Willow for never directly opposing her this episode! just some wide eyed sorrowful glances tossed.
Buffy proceeds to leave the room which gives us a great wide shot where you can see the cinematographic decision to have everyone literally opposing Buffy, very clearly signaling to the audience that it's Buffy vs the Scoobies once again.
Crazy thing is, the s2e11 episode Ted happens 2 months before this in which Buffy thinks she accidentally kills her physically abusive mom's boyfriend in self defence and the scoobies are fucking FRIGID to her for this. Only being fine again when it turns out he was a robot. Never even going over the fact that they never rlly believed that she was being hit anyways... (Id find quotes but watching that episode actually makes me so upset that I actually can't watch it lmao).
So in Buffy's mind, if she shouldn't be forgiven by her BEST FRIENDS for justifiable homicide, why should this guy be forgiven for First/Second degree murder? Why is she getting held to an impossibly high standard? But she doesn't point out these changing goalposts because this chick gets walked over like crazy by her 'best friends' lol.
Instead, being the embodiment-of-good-protagonist that she is, she internalises this lesson and decides to set forgiveness- for others and not for herself- as her personal motto (within reason) for the series moving onward.
Second the absolute ARTISTRY of the episode:
This part is pretty clear already but I want to write it anyways because its just that epic!
Buffy is once again getting her personal slaying mixed up with her professional slaying. "okay, over identify much?" Cordelia our blunt yet insightful Queen C points out. And clearly she's correct (refer to earlier paragraph).
Is Buffy mad at James for killing the thing he loved most because she thinks that's what she did to Angel? or because of what Angelus did to her?
The episode is leading us to believe the later, if not for the obvious gender pattern, than for the extreme violence that both the poltergeist and Angelus bring.
So when Buffy turns out to be the spurned one (in an incredibly addictive scene by SMG and DB), the resolution smacks you in the face. Of course!
Angel(us)/Grace = the way to old and experienced one who thinks they know better and just wants the other to live a so called normal life. Who ends things even though they still have feelings for the other.
Buffy/James = the way to young and passionate one who can't live a normal life. Who believes that "love is forever" and is willing to fight for it.
And in breaking the poltergeists hold over the school, Buffy (and by extension the audience) not only learns to somewhat forgive HERSELF in james, but also will understand Angel better when he leaves to LA next season.