Also, I think the basement held antique bookmaking tools that the uncle used to make forgeries of the rare erotic literature. He auctioned off fakes and kept the originals as a collector. Just a horrible guy all around.

Didn't get where all these visitors came from?
Seems rather another layer of collection, he just bought these stuff somewhere.
He chopped fingers with something reminding book cutter. Perhaps it was improvisation and not a usual torturing tool?
Also its raises the questions what did he do with his wife? Did he used octopus to suffocate her, cut vagina, etc?

Yeah I was out of the room when they showed the octopus glad I watched it again thanks

so why didnt he have his way with the niece?
I think it was implied that he had, when he brought her to the basement.
Was that why the Aunt hanged herself?
I recall the uncle saying he killed the aunt.

so why didnt he have his way with the niece? or was she pretending to be loonie to avoid it?
Was that why the Aunt hanged herself?
This movie kinda leave a few things to guesses rather imagination
http://my-impressionz.cu.cc

I am not sure what you are asking. Did you not see the end of the movie?
Essentially:
The dirty old Uncle's hidden sex shop including:

1. large octopus for tentacle fantasy therapy.
2. what looked like torture chamber for his sick fantasies (not counting puppet)
3. the intimate body parts of his past "visitors" or those who he/ and Octopussy had grown tired of.
   Did I mention the creepy puppet? Cause something tells me that he was in on it too.
   I just hope that he never showed what was down there to his "clients" for humanity's sake.

Poorly Lived and Poorly Died, Poorly Buried and No One Cried

I wasn't in the room when they were showing the octopus that's why I asked. I just wanted to know what the creature that's all.

What do you mean? You fell asleep during the movie or something? There's quite an important scene taking place in the basement, so no one really has to guess.

That octopus in the tank affectionately named "Donald Trump"

Looked like a torture basement controlled by that freak uncle.

What we saw at the end?