This article by Eugene Schwartz gives an explanation of why we try to keep All Hallows’ a scare-free experience for our youngest children. Please read and comment.
For the younger child, this festival reaffirms the goodness of the world. Eons ago, as they looked upon the mists that wove around their fjords and heaths, ancient Europeans had a particular experience as the days grew shorter. Toward the end of the month that we call October, they perceived the souls of all of those who had died in the past year gathering and preparing to ascend to their heavenly home, making a space for the souls due to be born in the year to come. But before they could assume their place in the ethereal realm, the departed souls had to sweep away all the detritus of the life just past and cast it to the earth. Thus the popular image of witches riding on their broomsticks is a misperception: in reality, the brooms are sweeping away the witches!
At the time when the child is in fourth grade, a sense of human mortality begins to dawn within her. Children of this age are rightfully and healthily drawn to all of the frightful and gruesome aspects of Halloween, and they look forward with trembling anticipation to visiting a haunted house, watching an horrific form arise out of a swamp, or, if only through a well-told story, being scared out of their senses!
For the younger child, however, the situation is different. The spirits and creatures with whom the younger child communes are not those created by human error, but rather those in whom the innocent and wise powers of Nature reside: gnomes and undines, fairies and elves, the spirits of stones and streams, sun and wind. For young children to be exposed only to the dark and demonic qualities of Halloween is to deny the unspoken conviction that they carry in their souls that the world is good.
— Eugene Schwartz