Hi
sillyrobot!
dooderding has been answering a lot of your questions, which is so awesome and I'm really thankful for, but I thought I'd jump in on this one. The blue and red fairies are the only ones that "respawn" when you rewind time. The green fairies can be purchased at a couple of different locations in the game, and they don't come back when you rewind time. They are mostly useful when you are fighting a boss or a more difficult enemy. If you're just playing around in a timeline and don't need to keep the progress of a quest you're working on then feel free to "die" and you'll recover full health that way.
Another little trick most people don't know is if you're low on health and want to recover, but you don't have a green fairy or you don't want to spend money on one, you can travel to a different time period, get in a fight and die there, which will rewind time and restore you full health. Then you can go back to the time period you were in and continue doing whatever you were in the middle of doing. It's kind of cheating, but hey, you have the power to travel through time, which is already sort of cheating at life to begin with, right?
People sometimes ask for cheats or saves with a bunch of stuff unlocked, but really you can already do a lot of stuff that's like cheating already built into the game. For example, there is a quest where you need to collect pearls from a bunch of random mermaids. This can take some time to complete, and you have to rewind the timeline a couple of times to get enough pearls. But what if you could sell one or two of the pearls to a pretty little salesgirl roaming Greece, and then travel into the future, buy them back from her, then rewind JUST the future timeline and buy them again from her? There are things like this in the game that let you use time travel to cheat.