I don't have any book suggestions, sorry, other than perhaps reading aloud the Secret Garden, and the Little Princess.
I'm just really interested in what you said about wanting to avoid books with "realistic" magic, and your past involvement with paganism. I respect your beliefs, and your right to decide what you are or are not comfortable with. I do not wish to argue with you or persuade you to my way of thinking; I'd just like to understand your feelings more.
I read books with witches and wizards in them when I was a kid, and never thought of any of that fantasy stuff as real, nor did it ever tempt me to do....well, I don't know exactly what reading fantasy books would tempt one to do. I just loved the creativity and imagination of those stories.
My sons read Harry Potter and tons of other fantasy books, and still love them. And not one bad thing has happened as a result. They go to church with me, they are kind, responsible, affectionate, confident, mature kids who make good choices.
But they know what it is like to read a book that carries you away with delight. They know what wonder is. They love reading (which, frankly, is key to a great education), and they think, as I do, that books are wonderful.
Would you be willing to explain a little more?