This is the first hint that the lady is in some way associated with the supernatural. This line doesn't make it clear whether the lady is a fairy, or whether she's just so beautiful and mysterious that she seems like "a fairy's child."
For sidelong would she bend, and sing A fairy's song (lines 23-24)
Again, it's possible to read this as romantic hyperbole, or overstatement. Is she really singing a magical, "fairy's song," or is her voice so sweet to the enraptured knight that it sounds magical to him?
She found me roots of relish sweet, And honey wild, and manna dew, (lines 25-26)
Giving the knight "manna" makes the lady seem almost divine. "[M]anna" is the heavenly food that the Israelites ate after they escaped from slavery in Egypt, according to the Jewish scriptures. But it's possible that the knight's perception of the honey, roots, and water she gave him is colored by his obsession with her. Maybe it was just ordinary spring water, but he was so in love, that it seemed like heavenly "manna dew" to him.
And sure in language strange she said – (line 27)
The lady speaks in a strange language. Is it actually a different language, or does she just have an accent? Or is she speaking a different version of English (perhaps a more everyday, common language) from what the upper-class knight is used to? It's unclear.
She took me to her elfin grot (line 29)
The lady takes the knight to her "elfin," or elfish cave. Was it filled with obvious signs of magic or witchcraft? How does he know that it's "elfin," and not just a cave where this lady lives? We don't get any of the details, so it's hard to tell.