I think one thing the head could represent is MC's awareness of Chitose's feelings. You'll notice that as he gets gradually closer to Chitose the head's eyes open further. And at the end, when MC has fully realized that both he and Chitose feel the same about each other, her eye's fully open. But precisely because that opportunity has past, with Chitose moving away and leaving, the head's eyes close again. Signifying that while he's arrived at the truth, things between both of them are now shut and over.
I should also add that I think once the MC returns home to sleep. I think everything he saw afterwards was a dream/delusion. Or more precisely, I think it was him having lucid interactions with his subconscious. So although he (nor Chitose) ever actually expressed their feelings for one another, the fact that MC does it in his dream shows that he has both finally reached the courage to admit this, and two, realizes that Chitose also has feelings for him. Although a dream, I do think this revelation that Chitose also always liked MC is a true one.
I think another thing the head could potentially symbolize is MC's comfort and understanding of women. At the start of the story he is a legit virgin with no understanding of women. But throughout the story, he interacts with a myriad of women and learns various things in the process (usually, but not always, how awful certain types of women can be lol). But by the end, he's gathered the courage to confess to Chitose (though only in his dream), and realizes that she also had feelings for him all along too. Essentially, and to get explicitly Jungian, I think the severed head represents MC's relation to his
anima.
Edit: Please watch the video I linked regarding the anima, as I think it basically explains everything you need to know to understand this VN and what was going on with MC's sexual delusions