This makes this story fabulous for analyzing attributes of a character and comparing them with character traits. I like to have my students illustrate and label a picture of the character inclusing the details that help determine who she is (ie. wand, crown, wings...). Then I have them illustrate actions that she does in the story so that they can draw conclusions about her character and define traits.
A critical challenge I often use is having children determine the characteristics of a fairy (students determine, often through illustration and labeling in Kindergarten), the criteria for a successful fairy if you will. As we read the story, they collect evidence (again through the form of pictures and labels) to evaluate whether or not Alice is a fairy.
The vocabulary is often something I take for granted when first reading this story with my students. But after a first read, they are often ready to discuss the meaning of temporary and permanent. I use a series of pictures to discuss temporary and permanent (it's a great way to tie in changes that we often discuss in social studies with natural and man made features).
With it's memorable character and the situations she creates, this is a book that gets read repeatedly in class without losing it's humor and effect on children!