Possible Clues:

• Female on a lake in an imaginary land of old
• 'The ___ Queene' (Spenser work)
• Spenser's "The — Queene"
• The land of the little people
• Note found by lake in a supernatural place
• Something enchanting from poet in steps of rare praise
• Mythical being, old-style
• Fabulous being, of late, praised regularly
• Old English folklore figure
• Fantastic country is fine, with a lake