I won't summaries the plot since we've seen most of it before - several times, in fact. There is only a little variation to keep things interesting, which comes in the form of the demon king's ally, a Buddhist Immortal who is working with him unwillingly and is an old rival of Monkey's.
This character is portrayed well, and helps give this episode an authentic feel of the original Monkey tales which, let's face it, many of the stories with the sillier monsters-of-the-week lack.
As for the theory about why these episodes weren't selected for the original run on British TV? Well, I don't have any definite evidence from this episode - there are some scenes showing piles of bones from the women murdered by the demon king, but they aren't on screen long and I don't think they could be considered more graphic than what has been shown before in the series.