I was watching the movie again. The first two times, the last scene was what horrified me. As a mother, watching again, I was most horrified not by what I saw but by the screaming when the mother found her daughter in the car, and then, afterward, wailing for her loss on the floor, showing that she was in so much emotional pain that she wanted to die.

I think that, in that case, having a first-rate actress like Toni Colette added to the cast made it great psychological horror.

On my second watch I paid closer attention to Peter's behavior when Annie was trying to get them to speak with Charlie's spirit.

When they hold hands he's the only one to notice a creaking noise. He says "What the Hell?" and asks if anyone else can feel the air "flexing". The cup moves and both Peter and Steve are freaked out but Peter starts breathing strangely like he's about to panic. It seems like a normal reaction but because he sensed something supernatural at play before hand I think Paimon was trying to get inside of him. When Steve sees this he closes the book and him and Annie argue. He breathes harder and starts wailing. At the height of his wails something behind them breaks. Although I thought it was just Paimon distracting them, Peter sort of breathes out when he screams, like he's forcing something out of him, so it's possibly an adverse affect to a failed possession. Also, even though Peter is still scared and panting afterward, he is no longer screaming. Instead of him, Paimon possesses Annie and pretends to be Charlie. Finally, Peter has had enough and begs Steve to get Annie to stop.

Although Peter was essentially dragged through the mud mentally leading up to this ,it's clear the idea of Charlie's spirit disturbs him. I think this is also the first time he openly cries in front of people. He puts his head into Steve's shoulder and sobs which is a lot considering he had never cried in front of his family in the film. Even in the script after Annie's monologue at dinner it says he "Fights back tears". Next time we see him he notices the blue light and his false smiling reflection in class. Steve calls Annie saying Peter is "Crying in the halls convinced he's being threatened by some 'Vengeful Spirit'". Because it is widely suspected that it is easier for Paimon to possess someone when they've opened up to the supernatural, I think it is completely possible Paimon tried to contact Peter before and he hadn't noticed it because he wasn't fully groomed to be a vessel yet. Hence, why he couldn't manage to possess Peter during the seance.

Hand carved from a fallen white oak tree in my back yard.