Not to belabor the point but,

         "but we all know Jack is not the only child,
          and Puff, living forever in a magic land will
          not be sad forever"

This depends entirely on interpreting the song is a larger sense. Reading the lyrics as written there is no implication of other children connecting with Puff.

         "but there are millions of children and Puff
          will befriend many many others along the way,
          no doubt being as loyal and loving to each"

That may be true enough, but it's only an assumption. Most everyone I've talked with about this song (and I was part of a folk ensemble that performed this song in nearly every concert for 5 years) interprets it as a sad ending. If Peter Yarrow wanted that positive ending he would have written it. Now I know that in recent concerts - such as the one that is always playing during my PBS stations pledge pleadings - they sing the last courus as: Puff the Magic Dragon lives by the sea. I remember quite clearly Mary singing the word lives loudly.

So, they have changed the ending.

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And then what's all this about it being a song about drugs? I remember that from when I was a kid but no one ever explained it well.

pax yall