
Actually, she turns into some spirit of the wind, and basically the moral of the story is; be a good kid so the little mermaid can eventually get the immortal soul she wanted. Weird but sappy. As a cynical 7-year old I was unimpressed with yet another adult trying to teach kids a lesson on 'good behaviour'. I hated that even after her sisters cut their hair for her, she couldn't even stab the jerk who treated her like pet or amusing little freak. Stupid sappy-ness, lol

His original Little Mermaid had her turn into sea foam. The turn into wind spirit stuff was a revision because he felt bad for her. I very much liked that she didn't kill the Prince because well she was never entitled to the Prince's love. She made her decisions and she accepted the consequence of those decisions. (I personally hated the wind spirit change because it lessens her decision.)
Chise aside, Hans Christen Anderson's stories were pretty fucked up—The Red Shoes is the darkest one of his stories I've ever read.