He is qualifying what he means by "genius." This is highly poetic, so I'm just taking a stab here, but if there is a specific context I am missing, please correct me...
Firstly, he is saying that he is using this word in an unconventional manner - he is not using the 'daily,' '9-to-5' definition of "genius," but rather a definition that you would bump into if you stayed up late (nocturnal.)
Secondly, he is making it clear that when he writes "genius," he doesn't mean 'super smart,' but rather, he means what the word historically (etymologically) meant, which was more like, as Webster defines, "attendant spirit [of a deity]." So it's more at that 'Citizen Kane is the product of a god working through a man...' I presume he says "bad word" because he is frustrated with how everyone just uses it to mean 'very smart,' these days.