Answer to Question 1
Fairy tales, due to their sometimes frightening and violent stories, can be somewhat scary for young children. Care should be taken in this regard.
This problem can be avoided in a variety of ways. First, one might choose tales that do not include violent scenes. One might also choose versions in which the violence is toned down. Of course, the world of childhood can be full of both real (e.g., events depicted on television) and imaginary (e.g., afraid of the dark) frightening things. The fairy tale may be superior to these, since in such stories good usually triumphs over evil in the end.
Answer to Question 2
Fables are stories used to teach a moral to people. They can be used for enjoyment, but their main purpose is to teach.
Folk tales are simple, unadorned stories. They are used to explain aspects of a society and natural events. They are usually stories in which good overcomes evil and justice is served. They are associated with the common people.
Fairy tales are often folk tales that have been adorned with many of the aspects of literature. They are more involved and polished than folk tales. They can sometimes be frightening and include violence.
A young cane toad (Bufo marinus)
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Young Guinea