The Bank of Scotland Imaginate Festival, which showcases theatre for children and young people from around the world, is a brilliantly curated gem of the Scottish theatre scene.

I never cease to be impressed by the quality and diversity of the work which the festival's director, Tony Reekie, manages to bring to Edinburgh year after year.

Dutch children's theatre enjoys a deservedly strong reputation, and has long had an important place in Reekie's programming. The Brothers Grimm's famous tale of Rumpelstiltskin, as told by Stella den Haag, is a good example of why.

Aimed at children aged eight and older, the show (presented at the Brunton Theatre, Musselburgh) is performed in everyday clothes, except that the malevolent dwarf of the title (played quite brilliantly by Titus Boonstra) is rendered strange by a corset around his waist and elevated heels on his shoes. The contrast between normality (the miller's daughter, Esmiralda, who enchants the young men of the town with her cello-playing) and the otherworldly (Rumpelstiltskin, his voice made sinister by electronic distortion) is achieved by the most simple and intelligent of theatrical devices.

Told by means of performed narration and live music (including Mozart and Saint-Saëns), this version of the story is, at base, about the passage of Esmiralda (performed with infectious empathy by Rosa Mee) from childhood into womanhood. The victim of her father's snobbery and paternalism – he boasts of her supposed ability to spin straw into gold – she is assailed by an over-confident, greedy man (the Prince, who, humorously, wears a vest with the word "anti-flirt" picked out in diamante) and a moral degenerate (the eponymous dwarf). In surviving the ordeal, Esmiralda seems to achieve the knowledge and self-confidence to become a woman. Indeed, the show's neatly observed and subtle references to nascent sexuality enhance this sense of growing up through her resistance to malevolent male attention.

The play bristles with clever innovations, from the dwarf putting nonsense phrases into the Prince's mouth (to the delight of the young audience) to Rumpelstiltskin being frozen forever in the shape of a garden gnome. Not for the first time with Dutch children's theatre, one is impressed by the work's thoughtfulness, skill and imaginative freedom.

There's another kind of freedom entirely in Traverse, a delightful work of comic dance theatre, staged, appropriately enough, at Edinburgh's Traverse Theatre by the French Compagnie Arcosm. For children aged seven and upwards, the show – in which a lonely young man in an unprepossessing flat allows his monotonous routine to be broken by dreams of romance and excitement – is like watching the great London-based company DV8 Physical Theatre making work for kids.

The piece shifts between seeming naturalism (such as the young man receiving a visit from a female neighbour) and the complete destabilisation of the scene (the walls shake and seem to melt away). Technically, this is achieved almost flawlessly.

With its live xylophone playing, percussion of human bodies on household objects and lovely movement, not least in a gorgeously danced solo by Anne-Cécile Chane-Tune, Traverse is wonderfully funny and emotive dance theatre.

There was more dance theatre at North Edinburgh Arts Centre, where Sally Chance Dance of Australia were offering This (Baby) Life for tots as young as four months. A beautifully pitched show, it creates a gorgeously benign environment of movement, simple vocals, fine live music (much of it played on steel drums) and carefully considered props.

As they play their music – ranging from Row, Row, Row Your Boat to tunes which owe a debt to Indian ragas – the company interacts with the young children by copying their sounds and movements. I was impressed to watch a very little boy soon realise how this game worked and begin leading the performer's actions by pulling his earlobe or falling on his side. The show is full of such moments, making this deceptively simple (thoughtfully constructed) piece as pleasurable for the adults as it is for the little ones.

Cloud Man, by Ailie Cohen Puppet Maker (at Edinburgh's Church Hill Theatre Studio), was one of five Scottish shows in this year's programme. Made for children aged four to seven, it follows cloud-obsessed young woman Cloudia as she searches for the titular denizen of the skies. This solo show, written with assiduous simplicity by Ailie Cohen and Lewis Hetherington, is performed, in turns, by Cohen and Jen Edgar. One can only hope that Cohen is more comfortable in the role than Edgar, who lacks the charisma and confidence to interact with a young audience.

Cohen's set and puppets are absolutely charming. However, a long, speechless scene, in which Cloudia undertakes a forensic search of a cloud, is notably ineffective. That said, so weak is Edgar's performance that it is difficult to tell where her shortcomings end and the show's own failures begin.

The Imaginate Festival in Edinburgh ends tomorrow. Some work from the festival will be touring Scotland. Visit www.imaginate.org.uk