The Fairy Doll spell would be all SORTS of overpowered if Nanase could just make fairies appear anywhere at any time. I mean, it's already sort of ridiculous, what with her making dolls from essentially nothing, but it could've been even more ridiculous.
It's just now occurred to me that it's a bit odd that Nanase didn't know what Grace had asked the squirrel. Grace talks to animals, but there's a sort of psychic translation going on, and she just speaks plain English while the squirrels speak plain Squirrel.
There are no plot holes, however, so here's what happened: Grace got out of the car first and almost immediately talked to a squirrel while Nanase switched to fairy mode. Nanase saw Grace talking to the squirrel from the car, but didn't hear what was being said. Something like that.
BAM. Everything makes sense forever.