Blood Omen 2 takes place before SR, but aftter BO (obviously). It does have to do with the beginnings of Kain's empire forming. Defiance takes place right after SR2. It picks up, literally, right after the final scene of the game, and does involve switching between Kain and Raziel who are in two different time periods. They're only in different time periods though because one of them (Raziel I think) gets transported back in time 500 years or something like that. There are no flashback sequences or anything like that.

And I stand by my opinion of skipping BO2. It really is one of the glitchiest games I've played and I thought the gameplay was mediocre at best. It's not a game that would have held up well over the last few years in that department either.