I think what's implied is that kids have fresh eyes. Their idea of beauty is more instinctive. If they like straight hair, then straight hair is "naturally" more attractive. I think that's BS of course. Our standard of beauty is very much shaped by culture. Men, women, kids have all internalized that standard whether they realize it or not, but this does not mean it could not change. It did for me... I find myself admiring other curlies in a way I didn't use to.
Anyone noticed that most old paintings and sculptures favor curlies? I'm convinced curly hair was the prevailing standard through most of history. If we assume straight hair is more beautiful because it's an instinctive thing, then we're trapped in a vicious circle.