When you grew up, did you have an imaginary friend? I never did – but Sophia, the young girl at the centre of this big-hearted tale, makes up for my omission by having two of them. This funny yet meaningful show is really meant for children, but it's charming and spirited enough to awaken the child in us all; it tackles some huge and difficult topics, yet every moment is filled with magic, ebullience, and joy.

It starts, surprisingly enough, with a funeral. Don't worry though, nobody's really died: this is simply Sophia's farewell to Mr Whatsit, the fun-loving imaginary friend she feels she's outgrown. But Mr Whatsit hasn't got the memo, and continues to bounce around her bedroom, desperate to bring happiness into both their lives. Actor Michael Smith makes Mr Whatsit a larger-than-life and loveable character, and it's genuinely poignant to discover that – like Bruce Willis in The Sixth Sense – he can see Sophie, but she no longer sees him.

Sophia's new friend Margo, meanwhile, is a modern-day Mary Poppins, brisk and sensible and with no time for silly play. She knows that Mr Whatsit's still there, and there's plenty of slapstick humour in her cool and collected attempts to gain the upper hand. But why is Sophia in such a hurry to grow up? Underneath the physical comedy, it turns out, there's a thoughtful and important story, which Paddleboat Theatre's multi-layered script sensitively explores.

For Sophia's life hasn't been an easy one. Pinned to her bunk-bed are drawings of the houses she's lived in; one of them, which she's drawn surrounded by wire, looks more like a prison than a home. We learn soon enough that she's in foster care, forever seeking a place to call her own, and well-balanced dialogue gently explains what it's like to feel so rootless. Inevitably it only scratches the surface of that topic – but it's a touching and thought-provoking starting-point for a conversation you might want to continue later on. There are more everyday lessons to be learned as well: in a witty pastiche of a courtroom scene, Margo explains why it's best to tell the truth – not simply for morality's sake, but because it's the way to forgiveness and support.

Yet the crowing glory is a visually striking flight of fancy, where Sophia takes her imaginary friends on an imaginary mission and discovers that – while it's good to chase your dreams – it's even better to keep those you care about close at hand. The whole audience gets involved in conjuring that particular scene, and indeed there are opportunities to participate from beginning to end of the show – whether that's playing with the Tickle Monster while the audience is filing in, shouting out suggestions for Mr Whatsit to act out, or for a couple of brave volunteers, getting up on stage for a starring role.

Margo & Mr Whatsit addresses a lot of deep topics in its 45-minute running time, but it tackles them approachably, with a lightness of touch. As an adult, what moved me most wasn't Sophie's back-story – but rather the show's commitment to the healing power of imagination, joyfulness, and play. We all need an inner Margo to guide our lives, but we need a Mr Whatsit too. There comes a time to leave imaginary friends behind… but in all of us, I hope, a little bit of that spirit can live on.