Fairy Tales are the "greatest and most natural art" because they put forth the Truth of things that are difficult to understand related to humanity. They tell us the truth of who we are and our origins. They teach us our spiritual powers. This is why they are most important for children. These truths flourish when absorbed in the right way, at the right time. Children need fairy tales as affirmation of their connectedness to Universal Consciousness and Natural Law, as we all are.

References:
Bunce, John Thackray. (1878). Fairy Tales, Their Origin and Meaning With Some Account of Dwellers in Fairyland. Macmillan.
https://catalog.hathitrust.org/Record/006496642

Steiner, Rudolf. (1913). Fairy Tales in the Light of Spiritual Investigation.
https://rsarchive.org/Lectures/FairyTales/19130206p02.html