Maybe the ability to explain the origin, lore, etymology of the fictional characters and their objects and languages much like some of the lore wiki sites. Also back stories, why the characters behave the way they do. Kids often ask questions that a book does not directly answer yet the answer often exist online and sometimes requires an adult to understand the context and reasoning. Perhaps the AI could literally ELI5.

If a story has it's origin in older and darker fairy tails the child could have the option to hear the original and scarier unredacted version of the story or back-story. Disney almost started to go this direction with Maleficent.

Another feature could be writing the child's name in the fictional language assuming there is some description and language rules, grammatical structure much like the languages created by J.R.R. Tolkien. Those are full feature complete languages learned and spoken by some people today for fun or to be covert.