Jill thinks Jareth wants Toby because Jareth thinks it would be less intimidating to interact with a kid than a babelicious girl. Then he realizes that Sarah is an immature dolt like him, and sparks fly. Full theory, quoting Jill, below.

“J wants T cuz he’s lonely – not necessarily for S – but for someone who can carry on intelligent conversation and listen to his music (looking bored in throne room)…But he’s socially inept, living as he does among stupid goblins and possibly chickens. It’s much easier to lust after girls like S than it is to interact with them. So he takes T cuz he figures it’d be easier to relate to a baby – and then the baby would grow up understanding him.

“But he watches as S navigates the L; he sets up awkward chance meetings, flirting in his own awkward way, the only way he knows how, develops a serious crush, and admiration for this girl who seems intelligent and socially inept like him. This is how T becomes S bait – due to J’s loneliness and social ineptitude.”

Summary: Jareth is a fraidy-cat who finds babies much easier to deal with because a) there’s no romantic tension involved and b) they don’t talk back. [Side note: Maybe he is surrounded by stupid goblins and chickens because he can’t handle communication with human beings! Hmmmm…]