Sexual politics was important in the late 60s. How seriously we need to take that today would be up for debate, but the 'sexual revolution' and gender politics (which means different things today of course) were 'front line' issues then, so it is germane to the broader subject matter. How it gets into the novel and movie really follows from that, with the added provision that: sex sells.

The daughter's wish to kiss her father in a sexual way, apart from the salacious element I have little doubt forms part of its inclusion in the original story, is to introduce a Freudian dysfunction to the family. Without this the future behaviour of the daughter becomes even more inexplicable than it already is. There is also an implied criticism of the 'dream family' that the legend of 'The Swede' starts with. So here we have the idea, and this was a common theme (well, a cliche really) in the late 20th Century, that the ideal family was really just a veneer of respectability and that underneath it all was inevitable ugliness. This seems rather peculiar now, because the idea of genuinely happy families (albeit of varying composition) seems to have been largely reclaimed with the end of the counter culture.

The two aspects above are interconnected.

The Swede runs from the hotel room for a number of reasons. Firstly it is to depict him as sexually repressed or 'uptight' to use the vernacular of the day. Secondly, the reference to his daughter being involved in a lesbian relationship is too much for him to handle. He figuratively as well as literally flees. He returns because he realises he has left without the cash and, more importantly, without finding out anything about his daughter's whereabouts.

Might be a bit late of a reply for the OP, but hopefully might be of help to future readers.

While I'm here, this movie misses the mark in so many ways, despite being a noble attempt. Firstly, the sense of time and place doesn't seem well grounded. This is paramount for a story that can only occur in a specific place and time. Yes, the story spans a generation but there is a vagueness to a lot of the sets and costumes and soundtrack that, if not actually anachronistic, is disorienting. Why, for example, play Brubecks's Take Five, from 1959 over a scene set about 1970? There's a lot of this sort of thing going on in this movie and it really does disturb the story.

Secondly, some of the one to one dialogue seems poorly paced and stilted. Some of the characters are frankly unbelievable. The therapist for example.

Thirdly, EM's accent is unconvincing.

Fourthly, the makeup. I have never understood why directors insist on trying to make young actors look old with latex. Seriously, if a character is meant to age 40 years, just cast another actor ffs.

I'm going to have to go back and watch the movie again as I can't even recall the plot, but thank you kindly for the response.

You're welcome.

Another problem I have with this movie is that the story now seems indulgent. In the 20th Century, novelists, and to a lesser extent film makers, made something of a fetish about representing the decline or dysfunction of the family as a microcosm of the same discord in broader society. Hence the title of the novel and film. In our global, post modern times, this comes across as contrived and narrow. These are after all, First World problems.

In the end, Merry is just a spoilt rich kid who turns into a murderer for no particular reason at all. Why Swede didn't turn her in when he first found her makes no sense. Nothing that could happen to her from that point could have been worse than how she was living, and plainly, as even the cop admits, her mental health issues would have been mitigating. At worst, she would have received proper psychiatric care. Ruth's claim that 'she wouldn't survive the FBI' hardly gives rise to Swede's decision to leave her be. Why would anyone, let alone a parent, care what a terrorist, who barely knew his daughter, thought?

I appreciate that drama arises from characters making choices that most people would not. But still, those choices need to be understandable. Of course those were strange days. Looking back, they only seem stupid.