Trunk is as good as new.
The issue - the latch was loose.
There's a metal plate attached to the trunk. The latch attaches to the metal plate with 2 bolts. (the metal plates attached to the trunk with 4 bolts.)
Apparently it's a common issue for the latch to come loose. In my case the two bolts holding it to the metal plate fell out (luckily in the trunk where I was able to recover them) and the latch was just dangling.
I was able to loosen the liner, reattach the latch to the metal plate and re-tighten the liner.
Only issue I ran into - space is tight underneath the liner, so when I attached the latch, I did it without putting the latch through the liner (otherwise my socket wrench wouldn't have fit). I was able to stretch the liner over the latch without ripping it and reattach everything. I was a tad worried - I almost undid the latch to put it under the liner properly, but thought about it and figured I'd be stuck either way - since I couldn't get a socket wrench in there with the liner in the way.
I can post pics if anyone's interested. I think the entire fix took me about 45 minutes, but it shouldn't have taken that long.
It took me 10 minutes to find my socket wrench.
I completely removed the metal plate as well. I did that because I figured it would be easier to attach the latch to the plate using my regular wrench. Good idea, but the area around the bolt is kinda walled in on the latch. The only way to reattach is with a socket wrench - a regular wrench will not work.
So don't bother taking off the metal plate, have your socket wrench handy before you start, and get a flat head screwdriver so you can carefully loosen the trunk liner. If you do all that first, the actual labor is about 15 minutes.
Trunk opens and closes properly now. Yay!