I do agree that the lines are being said / written by the narrator - however the narrator to me has a faintly sarcastic tone of voice (not anywhere near as sarcastic as the narrator of S&S of course!), especially when speaking of Sir Walter and Elizabeth. So I agree with Rachel's interpretation. I don't think that Elizabeth was ugly in any way - but I think she was veering rapidly away from as beautiful as she had been and she knew it. Her father is a fool in many ways - his being unable to see the truth about her is just another example.