In the books Umbridge actually scares me more than any other character, including Voldemort, and in this story you've captured exactly why that is. The dishonesty of her sickly sweet exterior reminds me in a way of Ted Bundy, who used charm and kindness to trap his victims. It makes complete sense to me that her actions are not just political, but also personal -- her political and eugenicist aspirations exist partially to provide an outlet for her own need to hurt people, and those beliefs are also deeply entangled with her sociopathy.
And it makes sense that she would target someone like Arabella, who's been isolated by the rest of the wizarding world. Sharply observed details like the fact that Dumbledore said there were "protective spells" but Arabella has no idea how they work, emphasize how dependent she's become on others, and how vulnerable that makes her. Umbridge is like a predator cutting off the weakest of the herd.
The fact that Arabella ultimately fights back is such a relief, and also works really, really well with the story. It's the same structure you often see in horror movies -- the heroine just barely escapes, so you get that catharsis after all the suspense... but then you realize the monster didn't die!
This is a wonderfully crafted horror story. Fantastic job.