Close relationships are irreplaceable social resources, yet prone to high-risk conflict. Building on findings from the fields of HCI, virtual reality, and behavioral therapy, we evaluate the unexplored potential of retrospective VR-embodied perspective-taking to fundamentally influence conflict resolution in close others. We develop a biographically-accurate Retrospective Embodied Perspective-Taking system (REPT) and conduct a mixed-methods evaluation of its influence on close others' reflection and communication, compared to video-based reflection methods currently used in therapy (treatment as usual, or TAU). Our key findings provide evidence that REPT was able to significantly improve communication skills and positive sentiment of both partners during conflict, over TAU. The qualitative data also indicated that REPT surpassed basic perspective-taking by exclusively stimulating users to embody and reflect on both their own and their partner's experiences at the same level. In light of these findings, we provide implications and an agenda for social embodiment in HCI design: conceptualizing the use of `embodied social cognition,' and envisioning socially-embodied experiences as an interactive context.