I believe that the mother died in childbirth and that is why she never returned. All of the folklore is a parallel of Ben's life. Macha the witch is Ben's grandmother, Seanachai is the ferryman, Machaleer (the Giant) is Ben's father. Macha tried to ease her son's inconsolable grief in much the same way that Ben's grandmother tries to help her son end his grief by showing him that living in the lighthouse is surrounding himself in the past and its sadness. Ben turns to fantasy as a way to cope with his mother's death, forgive his sister for what he sees as taking his mother away from him, and awake his father from his grief of living in the past. I think this sort of dual-story was intended by the writers, if you look up the Yeats poem that is quoted at the beginning of the film, you will see that it is about a child turning to fantasy because the heartache and trouble of the world is too much for him to bear or to understand:
Stolen Child
By W.B. Yeats
Where dips the rocky highland
Of Sleuth wood in the lake
There lies a leafy island
Where flapping herons wake
The drowsy water rats
There we've hid our fairy vats
Full of berries
And of Reddest Stolen Cherries.
Come away oh human child
To the waters and the wild
With a fairy hand in hand
For the world's more full of weeping
Than you can understand
Where the wave of moonlight glosses
The dim grey sands with light
By far off the furthest roses
We foot it all the night
Weaving olden dances
Mingling hands and mingling glances
Till the moon has taken flight
To and fro we leap
And chase the frothy bubbles
Whilst the world is full of troubles
And is anxious in it's sleep
Come away oh human child
To the waters and the wild
For the world's more full of weeping
Than you can understand
Where the wandering water gushes
From the hills above glen car
In pools among the rushes
That scarce could bathe a star
We seek for slumbering trout
And whispering in their ears
Give them unquiet dreams
Leaning softly out
From ferns that drop their tears
Over the young streams
Come away oh human child
To the waters and the wild
For the World's more full of weeping
Than you can understand
Away with us he's going
The solemned eyed
He'll bear no more the lowing
Of the calves on the warm hillside
Or the kettle on the hob
Sing peace into his breast
Or see the brown mice bob
Round and round the oatmeal chest
Come away oh human child
To the waters and the wild
For the world's more full of weeping
Than you can understand
For he comes, the human child
To the waters and the wild
With a faery hand in hand
For the world is more full of weeping
Than you can understand