I wouldn't confuse "fair" with "hot." Words like "pretty" don't have to imply sexual attraction. I can see a five year old girl wearing an adorable dress and complement her, calling her pretty. That doesn't mean I'm a pedophile. I call my cats beautiful, but that doesn't mean I'm into bestiality. The sunset can be beautiful or pretty, but I don't want to fuck the Sun.

I would see this as simply asking the mirror who the prettiest girl or woman in the kingdom is. Remember, the Queen isn't trying to get a date. She's trying to seek out and eliminate potential future romantic rivals. She's an aging woman jealous at the beauty of youth.

She's essentially asking, "who in the kingdom has the greatest natural beauty?" If they're a child, that beauty would be reflected as the simple innocent cuteness of an adorable young child. If they're an adult, that beauty would be reflected as actual sexual attractiveness. She's trying to take Snow White out while she's still a child, before she grows up and her natural beauty shifts from childhood prettiness to the sexual attractiveness of an adult.