When we first meet Babbitt in this book, it seems as though his life is going pretty well. But the one thing that makes us question this thought is the figure of the "fairy child" who comes to Babbitt in his dreams and offers him something that his waking life simply can't.
As the narrator tells us,
For years the fairy child had come to him. Where others saw but Georgie Babbitt, she discerned gallant youth. She waited for him, in the darkness beyond mysterious groves. (1.2.4)
No matter how much money he makes, Babbitt stills feels uncomfortable about getting older. Yup. Taxes, death, and wrinkles: they all suck, and they all happen to most everyone.
The fairy child offers him the dream of eternal youth (she's a total sexy Tinkerbell), which totally explains his desire to flirt with young ladeez later in the book: as the book continues, Babbitt decides that it's not good enough to dream about the fairy child. He wants to find her in real life, so he starts looking for the fairy child in the women he meets. He starts with his attractive young secretary, Miss McGoun. While she's taking notes from him one day, he realizes:
While she waited, tapping a long, precise pencil-point on the desk-tablet, he half identified her with the fairy girl of his dreams. He imagined their eyes meeting with terrifying recognition; imagined touching her lips with frightened reverence. (3.2.20)
At this point, Babbitt hasn't thought about cheating on Myra, his wife. But for the first time, he realizes that he's not only capable of doing this; he actually wants it badly, and it scares him.
And from this point on, it's like a pervy version of Are You My Mother? Babbitt goes around checking out the babes and thinking: are you the fairy child? Are you? He even gawks over his son's girlfriend, thinking that she looks a bit like the fairy child. Gross.
The fairy child is both symbolic of all the sexy young things who Babbitt will never bed, and also symbolic of his Titanic-sized mid-life crisis and general dissatisfaction. He's so dissatisfied with life that he thinks that perhaps he'll only find satisfaction with something out of the fairy world… or, barring that, with feeling young again with a hot chick.