Lady Elaine is a noble soul disguised in a devil's cloak. She is often seen insulting, confusing, or manipulating various characters in the Neighborhood of Make Believe - usually King Friday (notice that she is the only character to call him simply "Friday"). If the majority says "YES", she will inevitably say "NO". She detests authority. Lady Elaine was introduced into the Neighborhood primarily to teach children how to deal with cantankerous people in the neighborhood of life.
Fred Rogers taught kids how to deal with frustrating folk, depicted through the conflicts caused by Lady Elaine: Practice patience with difficult people - and at times it is necessary to call them out when they've crossed the line. Lady Aberlin was especially gifted in this area. Fred created a character - though a turd and sometimes hard to deal with - who is genuinely likable deep-down and worth getting to know, in spite of her harsh persona. At the heart of Lady Elaine is a beautiful individual.