Just wanted to throw a few thoughts on this, given my recent upload of my Book of Pales that covers some "Demonic" issues. First, I think Possession begs a variety of setting questions that RM, as a generic ruleset, does not address. We discussed this in overview here: https://www.rolemasterblog.com/rule-sets-settings-gap-rolemaster-shadow-world/
The overarching question is the disconnect between western thought of "demonic possession" and the actual mechanics of a fantasy world with a non-god pantheon and a vague idea of afterlife and morality. Hmmm.
Well, there are answers, but that requires the ruleset to be adjusted for a specific setting or for you to ask questions on the how and why. Because your questions aren't really about low level spells, RRs or levels--they are questioning how it works in general. Or, maybe I'm just being dense!