As suspected, the speaker isn't telling her father to lie back so that he can relax. She's telling him – or perhaps telling the part of him that is in herself – to lie back because he's dead.
But he hasn't died a merely human death. Because memories of him, like a vampire, have lived past his physical death, sucking blood (or at least the will to live) from our speaker, he must be killed like a vampire – with a stake to the heart.
His heart, here, fits with the rest of the descriptions of him – big and black (as in evil). It's the opposite of the speaker's heart, described in line 56 as pretty and red.
And the villagers never liked you. They are dancing and stamping on you. They always knew it was you.
Not only is the speaker's father dead, slain like a vampire, but the villagers never liked him anyway.
This seems like a reference to vampire lore. We're not talking Twilight here, but older literature like Bram Stoker's Dracula, in which vampires lived near little villages.
The poem shows us that it's kind of an understatement that the villagers never liked the speaker's father – they're so happy that he's dead that they're brazenly dancing and stomping on his dead body.
They're doing this because they always knew "it" was you. Given the vampire references, this probably means that they always suspected that the speaker's father was the vampire, causing all sorts of problems and mysterious disappearances in the village.
It's important to remember, as the metaphor grows wider, that this vampire is really just in the speaker's head. While the villagers could be a metaphor for the real, living people who surround the speaker, they're probably not actually villagers. And there's a good chance that the villagers are just in the speaker's head.
Daddy, daddy, you bastard, I'm through.
The poem reaches its crescendo with this line and, if it was a rock concert, this is where the guitars would be smashed.
The speaker has threatened that she's through with her father before, in line 68. But the repetition of the word "Daddy" here, and the addition of the word "bastard," makes this condemnation final.
Before this, the speaker has used the word "Daddy" only four times in an 80-line poem, not counting the title. Using this affectionate term for father twice in the last line makes it sound almost like she's beating on his chest to get her point across.
The use of the word "bastard" seems to be what this poem has worked itself up to. The speaker has tried out every way possible to criticize her father – he's a Nazi, the devil, and a vampire. But, in the end, she just wanted to get out a good verbal punch, calling her father a bastard.