I've been wanting to make a fairy garden with the girls. This would be an additional idea & introduce them to new plants. Country Gardens magazine has another one with step-by-step directions, Early Spring (January p.
Elf house on a tree! That would be cute in the garden, especially in the tree over grown with ivy. How about some battery tea lights in the windows during outdoor parties. I hear the fairies/elves whispering "home school project" in my ear.