After some thought, I would side with the Demon Lord mainly out of pragmatism and to further my own goals of forming an anti-divine pro-human polity. I would require that she at least strongly attempts to implement the following suggestions.
1. All Lilims are to be recalled immediately to Royal Makai and disciplined thoroughly. Lilims will be forcefully integrated into monster society's leadership role equivalents and barred from independent and reckless action (looking at you Druella).
2. The Demon Lord and her husband are to assume a more active leadership role (and delegate where possible) as the current level of disorder and detachment is unacceptable.
3. The expansion of monster territory (both passively and actively) will be ceased until all suggestions are implemented.
4. A means of controlling the passive monsterization and corruption effects of DE must be developed as soon as possible. Humans shall be allowed to enter demon realms protected from corruption and sexual misconduct. This is very important as true diplomacy and trade is currently impossible due to the passive effects of demon realms and powerful monsters. All charm and mind-altering magic will be restricted as well.
5. The Demon Lord must form a proper research division to assist in her attempts at allowing male births. Ideally, males should be born as humans and not incubi.
6. The Demon Lord must sever her innate energy link with all of her underlings once the male birth research is completed. This is non-negotiable.
7. The employment of mind-altering magics, substances and techniques (looking at mind flayers) must be regulated.
8. Monsterization and coupling with monsters must be made a choice wherever possible. This does not have to apply to enemy combatants.
Those that choose to reject monsters must be allowed to live peacefully in non-demon realms in isolation from monster kind. A minimum of landmass must remain completely untainted by DE for these neutral states.
9. A more active attempt is to be made at neutralizing the Chief God and her angels. Both CG and the Fallen God shall be held accountable for their crimes against mortal kind. All divines must agree to a policy of minimum interference with the mortal realm.
10. Humans and monsters yet to reach mental maturity (whatever the equivalent for their species is) are to be excluded from any monsterization or coupling. Hopefully, control over DE with #4 will prevent the passive corruption of children. The activities of the Sabbath are to be regulated to follow this. All "pedomorphism" will be STRICTLY consensual only.
11. "Wild" monsters that break these suggestions out of ignorance or disobedience and antagonize humans will be exempt from any protection.