As for why they would be wary, in this case they are forewarned. They've got characters in their party with at least vague understanding of the consequences of interacting with Fey, and their bosses are concerned and knowledgeable enough to warn them thoroughly. They still might be tempted to do something, of course, and I'd love to have particularly dark consequences if they do.

I do like the idea of having an illusory reveal, something beautiful that turns sour and vicious. Beyond dancing forever, aging/sleeping/otherwise losing large chunks of time, what are some other things that can happen to people tricked by the Fey? Beyond beauty, what do the Fey offer to sweeten the deal?