Lilith is a character from Jewish mythology. According to some Jewish texts she was Adam's first wife, created from dirt just like him. But she wouldn't let Adam control her, and wanted to control him, even going so far as insisting on being on top during sex. When god told her she had to obey Adam she ran away from Paradise and became a demon who had children with other demons. God sent three angels to get her back, but she still refused. One version says they told her to kill most of her children to stay out of Paradise, another version says the angels killed them as punishment. Either way she ended up with a lot of dead children but was allowed to be free.
She's often depicted as a super slutty demon, but a lot of feminist groups use her as their symbol, so I like to make her look like a horrifying feminazi (or a dominatrix with a strap-on, her wanting to be on top and all). Yes, I'm a feminist myself, but that doesn't mean I can't make fun of us.
The devil guy is all naked because I you look at the pictures in European churches devils are always running around naked with a massive boner.