Im on the 2nd main mission and there is a purple kodama. It says he wants something? What does he want?

They are called Sudama. You can drop items and get items back. There's more detailed information here: https://nioh2.wiki.fextralife.com/Sudama

It's funny I see this post because, and this is only from personal experience, but trading a Herbal Medicine (Exotic Rarity) will always at least give you a Red Spider Jelly and a Summoners Candle.