I feel like you can still do an interesting interpretation of Hatter without going that route. Rather than go...sexual in nature, you could maybe take the Alice story angle and make it more that Hatter's trying to bring that "vision" to life. Maybe have it be that he used to act out the story as a child and he uses children to recreate that time in his life. But because of his severe delusions and mental illness, he can't see the severe harm it's causing them. Or maybe he does and just doesn't care because he wants to recreate his childhood and his perception of himself that badly.
Also, I swear Hatter as a pedophile is only present in ASHOSE? Otherwise it's not really mentioned. It's a possible avenue you can go down, but not necessarily the only one.