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With regard to Charlotte Perkins Gilman's "The Yellow Wallpaper," it is important first to define the term "transgressive fiction." This kind of literature studies characters that experience feelings of confinement forced on them...
...by the norms and expectations of society and who break free of those confines in unusual...ways.
This definition applies to "The Yellow Wallpaper," as we see the main character, the story's narrator, suffering from postpartum depression (PPD). Her husband John (and his sister) enforces medical theories of the time with regard to the—at that time—unrecognized illness in a woman's life following the birth of a child. Instead of allowing the "unnamed protagonist" an opportunity to heal based upon her personal sense of her needs (a desire to leave her room, see her child or even write in a journal), she is forced into complete seclusion.
The narrator is confined in thought and deed. Society's dictates can be seen in her comment:
John laughs at me, of course, but one expects that.
The narrator reflects the common occurrence and social acceptability of having her husband (and others with their wives, we can infer) laugh at her ideas—demonstrating a sense of superiority, and a refusal to see a woman's ideas as valuable or recognize her as an equal.
This dismissal of the narrator's concerns are shown in her husband's denunciation of her worries:
...John has cautioned me not to give way to fancy in the least. He says that with my imaginative power and habit of story-making, a nervous weakness like mine is sure to lead to all manner of excited fancies, and that I ought to use my will and good sense to check the tendency. So I try.
The narrator's "good sense" tells her that she needs a diversion, though it tires her out, but John (her husband and a physician) forbids it, believing he knows what is best for her.
I think sometimes that if I were only well enough to write a little it would relieve the press of ideas and rest me.
In an effort to escape the unrealistic and unhealthy boundaries placed upon her, the narrator becomes fascinated with the ugly wallpaper in the room at the top of the house, where she is virtually imprisoned—though the room is greatly unsettling—even promoting the "fancies" she experiences.
In time, the narrator becomes obsessed with the wallpaper:
There is a recurrent spot where the pattern lolls like a broken neck and two bulbous eyes stare at you upside down.
I get positively angry with the impertinence of it and the everlastingness. Up and down and sideways they crawl, and those absurd, unblinking eyes are everywhere.
The narrator begins by seeing faces in the paper; soon, she "sees" more:
...in the places where it isn't faded and where the sun is just so—I can see a strange, provoking, formless sort of figure that seems to skulk about behind that silly and conspicuous front design.
In time, the narrator loses her connection with reality, becoming the prisoner in the wallpaper.
In terms of the "moral high ground," I do not believe it is based upon the author's views, but that of society. The narrator's behavior (questioning the social mores of the time through her challenging of her husband's decisions) can only be acceptable in her madness. By being insane, the author notes that the woman's behavior can be "excused."