If you only expect to get to around level 4 with your game, I really don't see the Faerie Dragon messing much of anything up if given as-is. The worst it can do is a breath weapon shutdown at a DC of 12, which failing that is embarrassing even at 3rd level, and Grease 6 times a day.
Its most powerful spell is Greater Invis, and that even only lasts 3 rounds as per its "CL 3rd" line.