I don't think she's attracted to children, it's just maternal instinct kicking in. What's more disturbing is that she is so enamored with shota Fooly that she doesn't care the regular Fooly is not around, which does imply she isn't that much into him. Master sticking around suggests this will probably end at some point.
@Richman - I think like with all reversible transformations, all the information about who Fooly was before is stored somewhere. Maybe in his aura or in akashic records.
So when the transformation is dispelled, the real state of a person gets restored. Whatever memories Fooly accumulated while transformed risk being overwritten.
On the other hand, this Fooly seems to recognize Leo. Which means this Fooly is the current Fooly, with the concept of "child" forced on him by magic. Which means he has all of his adult mind somewhere in his head, it's just sealed off. When the spell wears off, Fooly would be super-embarrassed.
So next episode is where Fooly suddenly pops back to an adult in the tub trope? *eeek* big boot to the face and gets knocked out. Maybe a bit more origin story?