Act 2: There's a lot of space in this tub.
The next day, the story continued but was more elaborate, since I had
to extend bath time to take care of her little sister. She narrated
the entire story, in 3 year old english, so I will relay what I could
figure out. The alligators had turned into crocodiles. The mermaid had
magical powers. The boy had a name, 'Ernie'. And the other bath toys
were getting into the act.

Ernie was stirring while he was taking is nap on the cliffside. He
rolled over and tumbled into the sea, hurting himself, very badly. The
mermaid, was able to use her powers to heal the boy and returned him
to the cliff. This kind act was repeated several more times as he
liked to roll in his sleep. Finally, the mermaid allowed him to stay
in an underwater cave attached to the cliffs. Once he woke up he was
greeted by lots of animals. She (the mermaid) went on to tell Ernie
about some dangerous dinosaurs that were threatening the animals. He
offered to help since she had been so nice to him.
More conversation happens and the next time I check on her, the cave
had become a space ship seeking out the space dinosaurs. I heard her
say quite clearly, "Get to your stations!" so I asked her, "are the
animals in a space ship?" "Yes" "and they are going to their battle
stations to fight?" "Yes..."
"well ok then, good luck!" "thanks, now go daddy."
Some time later the space animals had to take a nap and that seemed a
perfect time to get her out of the tub.