I'm looking for a more holistic solution that "understands" the entirety of a book (let's say fiction to drive the point) and can "reason" about character arcs / action evolution throughout the entire narrative.

There are lots of solutions using embeddings which basically boil down to a text search and picking some number of sentences / paragraphs around the search results to construct a "context", which may work with a limited set of technical / non-fiction documents but is otherwise of narrow use.