Actually I've heard that in one of the stories (can't remember which) it's said that she just starts another battle (continue) if she looses. She continues like this until she wins. When she is facing a opponent like this however...
The original question tough was about how Yukari would do.
Born in the light.
Molded in the dark.Never Forget,
Keep Fighting.
Don't Forget.
Always, somewhere,
someone is fighting for you.
As long as you remember her,
you are not alone.
Yukari could just snap her fingers and bam, she wins by manipulating the boundary of life and death.
Sometimes when you're driving down a road, a bug hits your windshield. It's ugly and unpleasant, but you just activate the wipers / cleaning fluid and it's gone in a few seconds. It's just part of driving down the road. You don't dwell on it, because that'd be silly. Bugs aren't worth the time.
Watatsuki no Yorihime can summon Gods. The Dragon God is a god unaffected by borders. Watatsuki no Yorihime can summon the Dragon god. Seriously tough, she did loose the lunar war.
Born in the light.
Molded in the dark.Never Forget,
Keep Fighting.
Don't Forget.
Always, somewhere,
someone is fighting for you.
As long as you remember her,
you are not alone.
If Yukari was pragmatic, she wouldn't even need to snap her fingers. Yorihime would be gone if Yukari manipulated the boundary of existence/non-existence. Of course, that would trigger a massive war between Gensokyo and The Lunarians, possibly against the entire world. As for the manga, I can see why Yukari settled on such a small victory (SPOILERS AHEAD :p). If she went for a large-scale victory, that would give the Lunarians enough incentive to go to war, and that would be reckless and incredibly unwise of Yukari.
One side of the argument for the Lunarian War 1,000 years ago was to capture the moon, or to teach the Youkai a lesson in accepting what they already have. You could argue that Yukari lost that one because of the Lunarians' power, or you could argue that Yukari intentionally sabotaged herself. If you pay close attention in the manga, you can see that she has the ability to plan many steps ahead of even Eirin, making it seem like she lost, but instead proving that she simply wanted a different prize than the obvious one. She made it seem like she lost by getting herself tied up and all that jazz, when she actually got someone on the moon and desecrated their sacred land, as well as taking their prized thousand year sake. I suppose you could say that she was fine with publicly losing, just as long as she had her own covert victory over the Lunarians. She made them think she was after their city and that they won, when she was actually in it for her own satisfaction.
As for the Dragon God, even they have boundaries. If there is a piece of canonical information that says otherwise, please share it. It could make a difference. There's still the risk that Yukari would kill Yorihime before she could summon the dragon, but there's also the risk that Yukari won't be fast enough.
The point I'm getting at is that yes, Yukari would easily win in a no-holds barred fight, but she would most likely take the fall so that The Lunarians won't go to war with Gensokyo. :p
The gensokyo barrier is a very strong barrier right? The Dragon god isn't affected by it at all. In fact the Dragon god is the created and destroyer of Gensokyo. It is also pretty much essential for life to exist. http://en.touhouwiki.net/wiki/Dragon_%28God%29
Born in the light.
Molded in the dark.Never Forget,
Keep Fighting.
Don't Forget.
Always, somewhere,
someone is fighting for you.
As long as you remember her,
you are not alone.
Ah, but there lies the problem. It says that he can pass through the Hakurei Border/Boundary, not that he is immune to boundaries.
Yukari can do the same as the Dragon God, but she can still be affected by boundaries. Just because one can pass the boundary of Gensokyo, does not mean that one has no boundaries governing them, or that they are immune to boundary manipulation. The Hakurei Boundary is simply a wall, not one that affects the boundaries within a living being. Because of the fact that the boundary does not affect the boundaries governing the Dragon God, he has nothing to worry about and can pass straight through without any detriment. In a sense, he simply has the key to Gensokyo, especially since he was the creator of the Hakurei Border and Gensokyo in the first place.
The same could be said about Yukari. She can freely pass between the boundary, but she still has boundaries governing her. If you took a clone of Yukari and put them against each other, they could kill each other by boundary manipulation. The only way Yukari would be immune would be if she altered the boundary of immunity/vulnerability, but even then, the boundary itself is still vulnerable to boundary manipulation. She would then have to alter the boundary of that boundary and repeat the process to give her more time to remain invulnerable to boundary manipulation.
As for power level, it's all a matter of "who shoots first". For example, Flandre has the power to destroy everything and anything. She is weaker than the Dragon God, but she can still kill him, just as long as she gets the first shot. This goes to show that power levels are irrelevant in a fight against Touhou Characters. What matters is who can strike first, kind of like those old Western fast-draws. The fastest one wins.
In short, he does have the keys to Gensokyo, but he is still governed by boundaries, just as Yukari is. Not only that, but power levels mean nothing when everyone has cosmic powers. It all comes down to whether or not Yukari can blink Yorihime out of existence before Yorihime can finish her prayer to the Dragon God. In the manga, she needs more than just a second to invoke the gods, which gives Yukari enough time to act.
That being said, Yukari would still have to take the fall, due to politics. She would not want to start a vicious war with the Lunarians for killing one of their leaders. If there was no politics involved, Yukari would have no reason to hold back, giving her the victory.
Well as I understood it the dragon good is that kind of Omnipotent god. Basically that means that if he wants something it happens. Oh and did I mention that ZUN himself have said that the Watatsuki sister are the most broken characters. As for speed, they can react at light speed.
Oh and by the way, Mokou doesn't count here as she is canonically proven to be able to defeat Yukari. She can't die.
Born in the light.
Molded in the dark.Never Forget,
Keep Fighting.
Don't Forget.
Always, somewhere,
someone is fighting for you.
As long as you remember her,
you are not alone.
I would not be able to be online for 2 - 3 days, starting from tomorrow afternoon. Letting you know now so that when the time comes nobody cries while asking for "Where's Wriggu I need him for blah blah blah"
I can see where you're coming from with the Dragon God, and I'll admit you got me there. :p That being said, he is still useless if he cannot be summoned fast enough.
The Mokou argument actually proves my point. Mokou is nowhere near as powerful as Yukari, but she has something that could help her, her immortality. Yukari could alter the boundary of Immortality/mortality and remove it, but if she didn't, then Mokou would most definitely win. In the end, it all comes down to one's particular power. Mokou has a sort of "life insurance" when fighting anyone. Yes, Yukari would kill her time after time, but eventually, Yukari would need to rest, giving Mokou the chance she needs. Mokou's power level is greatly overshadowed by Yukari's, but her ability allows her to take down somebody much more powerful than herself. The same could be said for Yukari and the Dragon God. Yukari is weaker than the Dragon God, but her power could remove his omnipotence via the boundary of omnipotence/non-omnipotence. She's weaker, but her power gives her the edge. The Dragon God would need a way to counter it. I can imagine that he would have something similar to Yukari's ability, and if so, then he would be fine, just as long as he protects his boundaries with more boundary manipulation.
As for the light-speed reaction time, I'll need proof, a source. If you can give me this, then I will relent and agree with you that Yorihime would win. That being said, Yorihime won't be able to summon the Dragon God fast enough. In the manga, she needs to invoke them, which takes her the amount of time to finish a sentence. In a battle such as this, the fastest reflexes will help, but her praying to the Dragon God would get her killed by Yukari. If she has light-speed reflexes, then her best chance at winning the fight would be to strike Yukari down with her magic katana before Yukari can react.