Love fairies are almost vampiric in their need for humans to sustain life but it isn't blood that they suck.
Sexuality is a way of life for Kyu and her people. 'Though she is very old by human standards she is quite young in fairy years. She will then add herself to the HunieBee as a datable character. When you try to leave, however, you will be greeted by Kyu, who will tell you that she wants to date you as well.
After this you will wake up the next day and proceed as normal. To unlock Kyu you have to get five hearts on any one of the girls, with the exception of Celeste or Venus as they can only be unlocked after Kyu, and complete their sex mini-game.