multiple levels

Many jokes and many works of art operate on more than one level. The best works operate on many levels, and can be enjoyed by people from many backgrounds and of all ages.

Consider the old Warner Brothers cartoons - they combined many elements that appeal to adults while simultaneously entertaining children. Your aunt managed the opposite - to address her daughter's issue while entertaining the adults.

There's nothing wrong with this, nor any driving need to clue in children. They will learn soon enough. On the other hand, I don't believe that there is, in most cases, a driving need to prevent children from learning the whole truth. I just think that they would probably find you rather boring if you insisted on explaining every comment that flew over their head. Let them enjoy it as they see it, and clue them in occasionally if they seem particularly confused or if the situation demands it.