The thing about this fragment is that half of it is dual-layered, and the rest is poetic. How it is being read above (that he ate an actual heart, got physically pregnant, etc.) is utterly at odds with poetic license, metaphor, and the skaldic love of wordplay and kennings- and thus missing what IMO are the most likely interpretations of the verse. To grasp its intricacies, let's take it piece-by-piece.
First, what is it that Loki eats?
The woman's heart; in one translation, it is 'the thought-stone'. In a low-tech society, the thought and evidence would be that the body produces stones - kidney stones, gallstones, all this sort of thing. So what would a thought-stone be? The product of the mind, of thinking - or, considered carefully, 'ideas'. Linked with the heart, this makes them what would be called closely held ideas - strong beliefs. That the heart is half-cooked - or in perhaps more modern and cutting terminology, 'half-baked' - may well be important, with all of its connotations of 'poorly thought-out', or simply 'bad' or 'crazy'.
Next, what's up with that fire?
Well, the woman's heart/thought-stone is found 'on a fire' made from a linden tree. In Norse belief, the linden tree is sacred, female, and linked with mercy (as the oak tree is linked with stern-ness); village discussions, hearings, and judgements are given from under the village linden tree. If the heart indicates ideas, then ideas cooked 'on a linden-fire' would be thoughts developed (cooked) while sitting at judgement (under the linden-tree).
So then who's the woman?
Well, the above very strongly indicates that the woman is considered a leader of the village, as the elders would be the ones actually sitting directly beneath the tree. We know of a number of females in Norse mythology who are strong leaders, such as Freya and Frigga, but neither of them are in close relation with Loki. There is, however, a female who is not only a) closely linked to Loki, she is also b) a strong leader of her people, c) considered by the Norse to be 'wicked', and d) someone who has close congress (both physically and philosophically) with Loki: Angrboða.
Angrboða (translated as "the one who brings grief" or "she-who-offers-sorrow" - I prefer the more direct "Grief-Bringer", though 'Angr' is 'grief', and 'boð' is 'offer') is the chieftess of the jotunn of Járnvid ('Iron-wood'); these female jotunn are numbered among the ogresses, but the Norse skald is nothing if not prone to exaggeration, and so 'leader of the clan' gets expanded to 'all the ogresses of the earth'. She is also the mother of what so far as I know are the only three in Norse mythology who are explicitly called monsters - the Midgard Serpent Jörmungandr, the great wolf Fenris, and Hel Half-Dead. That all these three are fathered by Loki is one of the other layers of the above; we'll get into it a little later.
Okay, so Loki eats Angrboða's heart?
Well, no - not literally. If the heart/thought-stone is an idea (or many ideas) that are dear to the one who has them, then how do you eat them? Well, eating is consuming; you 'consume' an idea by listening to it. So Loki eats the heart, or rather, he actually sits down and talks with this vibrant, charismatic leader, and listens to the ideas she's developed from sitting in judgement over her people, and takes her ideas for his own - he 'eats her heart, her thought-stone'.
But what's this about pregnancy?
Well, how can you 'get pregnant' by a thought? Why, by taking it as your own - internalizing it, we would say. Now, actual birthing is only implied - 'thence in the world are all wicked ones come' is definitely suggestive of a pregnancy that results in birth! Take this back to being 'pregnant with an idea', and what would be the product? Why, more ideas, of course!! And if the 'more ideas' that Loki births are 'all the wicked ones', then this is suggesting that all the bad ideas he has after this are a result of him taking into himself the ideas he gains from the ogress/giantess Angrboða.
Another layer of this is the concept (essentially held even in modern times) that a man 'is pregnant' when a woman carries his child. Angrboða gave three children to Loki (Jörmungandr, Fenris, and Hel), and so with a shift of emphasis of reading, as well as a realization that Loki meeting a female who could deal with him on his own level would definitely enflame his passions, it is only a small step to see that Loki's dealings with Angrboða soon proceeded to sexual relations, and he impregnated her - 'with child from the woman | Lopt soon was, And thence among men came the monsters all.'
Reading Nordic poetry and sagas, even in translation, rather requires an understanding of kennings, poetic license and metaphor, Nordic beliefs, sociology both general and particular, and a realization that the damn skalds pretty much never talk straight at something. Always consider that the meaning of the actual word, phrase, or concept is a stand-in for something else, and you probably won't be too far off. ;)