Full spoilers follow.
The dream that opens the film is the key to everything. Lucy dreams of a "sad man" and begins writing a book about him — a project the story presents as a child's whimsy and later reveals as a calling. When pneumonia puts her in the hospital just before Christmas, the interruption is not the end of her project but its fulfillment: the sad man is there, in the same building. Edgar Ruiz is a convict nearing the end of his incarceration, being treated for kidney failure, and estranged from his family. Lucy recognizes him immediately and sets about befriending him. Her guardian angel, Grandpa Jackson, works alongside her in bringing about the miracles that begin to soften Edgar's heart.
Lucy dies. The film's central shock, and the thing that sets it apart from most family-oriented Christmas fare, is that it does not save its protagonist. The doctors cannot determine what is actually happening with her, and it eventually becomes clear that the pneumonia will kill her. What follows is the film's real climax: Lucy is not frightened. She accepts her death with a maturity far beyond five years old, and makes a single request — that her kidney be given to Edgar.
The transplant. Edgar receives Lucy's kidney and, with it, a second chance at life. The organ is the film's thesis rendered physically: the child who came to find the sad man ends up literally continuing inside him. The gift is unearned — Edgar did nothing to deserve it, which is exactly the point the film has been building toward, and the reason his subsequent choices matter.
The ending. Lucy passes away peacefully and is seen walking hand-in-hand with Grandpa Jackson into the afterlife — the guardian angel who accompanied her through the story now escorting her out of it. The final movement belongs to Edgar: he is shown having fully embraced the lessons of forgiveness and love that Lucy taught him, reconnecting with the family he had broken with, and living in a way that honors her memory.
What becomes clear in retrospect. The title's two halves finally lock together — Lucy is the shimmer, the small light, and her story is a Nativity in reverse: a child who arrives at Christmas, gives everything, and leaves peace behind. The book she never finished writing was never really the point; Edgar was the book. And the structural sleight-of-hand becomes visible too: the film is named for Lucy, but Lucy never changes. She is the fixed point. The arc, from the first frame, was always Edgar's.