Yes but their imagination knows no boundaries. Later on they get it but so does their imagination diminish.

I'm quite unconvinced by that. This might be true, but most of "kid imagination" I've seen or heard of was mashing up things they've had some experience with ("the dinosaur fights the action man", "my uncle can teleport"...). They don't seem to be able to think in the abstract, or even think outside any box (such as imagining that somebody could be more than 10yo! What would a 1000yo, 10000yo be like? An adult would have much much more imagination).

We find them funny and weird because they take mash up things we got bored or familiar with (dinosaurs, age), so they shake up our world a bit. But imaginative? Some adults are terrible at imagination, but many are amazing

Agreed. I keep coming back to a comic by Boulet which you might enjoy: http://english.bouletcorp.com/2007/12/11/fuck-peter-pan/

Part 2: http://english.bouletcorp.com/2008/06/19/fuck-peter-pan-part...

Haha Boulet is great, I forgot about this particular comic, thanks! Exact explanation of what I mean