I don't think you're spoiling things for her, personally. My parents
were very honest and up front about there being no fill-in-the-blanks,
but then added, "but you probably shouldn't talk about it with other
kids, because they might believe in [Santa, tooth fairy, whatever] and
you don't want to disappoint them. Besides, it's still *fun* to pretend
that these wonderful things exist, isn't it!" So I happily
half-believed in fairies and in fact spent hours hunting for them in
the woods, just using my imagination, and I went along with the Santa
idea at Christmas because it was fun, etc.

I *am* a huge fantasy enthusiast, and I always appreciated the idea of
elves, fairies, magic, supernatural stuff generally. It would almost
have spoiled it if someone could have said, "yep, fairies are real,
look, there's one," because all the mystery and imagination would be
gone.

Just my $ .02!
Melania