I was too old for ponies when they came out, but all the little kids I babysat had them and I loved playing MLP with them. I really enjoyed reading your post. I remember how many hours I put into playing with my dolls as a child. I remember making tables and stuff and sitting my dolls around them. So I did that with the kids I babysat for. We had pony parties and spent a lot of time with the sea ponies during bath/pool time. We never really played with them like horses. In fact most of the kids I remember treated them more like dolls than horses.
I was still a kid myself when I babysat, but not young enough to own ponies. I secretly loved them though and wished I had them along with Strawberry Shortcake which I did break down and own one of those way past the age and loved her so much. I also bought myself about 3 cabbage patch dolls with my babysitting money..all because of the fun the kids I babysat had with them.
So ponies were a huge deal too..I remember playets the kids had and us acting those ponies out with those sets. Now I have like 110 G1's and they are my favorite thing to do with my youngest niece who is a total pony buddy for me LOL.
Watching her play with them reminds me of all those 80's kids I kept..so many years ago. Those were happy times.
I use to take all sorts of vinyl dolls into the tub and I never remember it damaging them other than their eyes and I have a treatment that fixes that..so..water and kids with toys is a huge mix of great fun..toys can be damaged though..but thats what toys are for to play.
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) and Nirvanas galore. 
Ooh and hop over to Australia for some alternate Birthflowers! 