Maybe a small point, but my almost 5yo doesn't mind if he doesn't understand a book. He loves Geranimo Stilton books and comics (mostly read alouds), but the story is over his head. We got a Nate the Great book (buddy reading), which he loved, but the storyline was just wildly beyond him (the main character is in middle school).
She's probably getting something out of the Rainbow Fairies, and if she's enjoying it, does it matter that some things are beyond her?
you are dead right - I haven't taken it away! Besides she feels so grown up reading her chapter books :-)