One idea could be that Jack and Little Red form an unlikely alliance in the woods. They discover a hidden magical glen that neither of them knew existed. Together, they have to protect this place from the encroaching darkness that is starting to seep into the woods. Maybe they use Jack's climbing skills and Little Red's knowledge of the forest paths to their advantage.
What if Jack and Little Red find out that the entire woods is an illusion created by a powerful sorcerer? The sorcerer has been testing them all along. Once they realize this, they have to find a way to break the illusion and face the real world outside the woods. This would completely change the setting and nature of their adventures in the 'woods'.
The friendly neighbor who lives on the outskirts of the woods can also be a great addition. They could bring news from the outside world, or be involved in a budding romance with one of the characters from the little house.
Another plot idea is to have a character from the modern world somehow time - travel to the 'little house in the woods' setting. This could bring in new ideas and technologies that shock and amaze the original inhabitants, while also creating some comical misunderstandings.
Little House in the Big Woods is often classified as realistic fiction. It provides a vivid and believable account of life during that era, but like many works, it might blend real-life elements with some fictional enhancements to make the narrative more engaging.
Little House in the Big Woods is definitely fiction. The author crafted a tale that may draw inspiration from real-life elements but is not a factual account. It's a wonderful work of imagination and creativity.