With sex, maybe something like this?:
"You see, A11-Y, mister MC really loves mommy, aunt Ashley and miss Lin and other girls and organic species have this tradition that when a man really love a woman, he plugs in his USB stick into her USB port and then releases a special white liquid to show her that he loves her. Your mommy was build with this USB port, but you were build without USB port or USB stick, because only adults can do this, but, maybe, when you will get older, maybe we will get you a body with USB port or USB stick and then you will be able to try it yourself."
Or maybe something else, I don't know.
And how should we explain slavery to them?
"Humans outside the hotel are mean to elves and androids, because they are evil, but humans here at the hotel are nice, so you should always stay in the hotel and never go out, because if you will go out the evil humans will try to hurt you, and they will try to use you to get to mommy and mister MC and the rest of your friends from the the hotel, but the hotel humans and mommy will protect you, but they can protect you only if you are always in the hotel, you can't trust the outside humans, you can trust only the hotel humans, never go out!" or something like that?