The Pokemon phase started with my son at age 6 and is still going strong at 9. He collects the cards, reads the books, watches the show and plays the video games. It appeals to his sense of wanting to sort and categorize information. He likes to memorize what each Pokemon does, what type it is, what its HP is, etc. and he likes the strategy involved, and he likes to discuss all of this with other kids. To me it is similar to my brother's childhood obsession with baseball cards. I have no problems whatsoever with the content of the show or the video game. It isn't violent (the Pokemon "battle" but in a sports kind of way, and no one ever gets hurt), there are strong girl characters, and it teaches lessons about hard work, perseverance, loyalty, friendship etc.
And Jigglypuff is sooooooo cuuuuuute.