The Turn of the Screw: the kids and the 1st appearance of the ghosts

For the holiday, I’m reading The Turn of the Screw. Note that I have seen Jack Clayton’s adaptation The Innocents. 
Are the ghosts real? Or is the governess mad? 
Are the children abused and then possessed by ghosts? Or does the sexually repressed governess imagine everything? 
Look at these lines about Miles: 

“Perhaps even it would be nearer the truth to say that—without a word—he himself had cleared it up. He had made the whole charge absurd. My conclusion bloomed there with the real rose flush of his innocence: he was only too fine and fair for the little horrid, unclean school-world, and he had paid a price for it.” (Ch.4) 

I’m concerned. 
And then:

“We expect of a small child a scant one, but there was in this beautiful little boy something extraordinarily sensitive, yet extraordinarily happy, that, more than in any creature of his age I have seen, struck me as beginning anew each day. He had never for a second suffered. I took this as a direct disproof of his having really been chastised. If he had been wicked he would have “caught” it, and I should have caught it by the rebound—I should have found the trace. I found nothing at all, and he was therefore an angel. He never spoke of his school, never mentioned a comrade or a master; and I, for my part, was quite too much disgusted to allude to them. Of course I was under the spell, and the wonderful part is that, even at the time, I perfectly knew I was. But I gave myself up to it; it was an antidote to any pain, and I had more pains than one. I was in receipt in these days of disturbing letters from home, where things were not going well. But with my children, what things in the world mattered? That was the question I used to put to my scrappy retirements. I was dazzled by their loveliness.” (ibid.) 

I don’t know, the way she talks about her pupil creeps me out. 
Now let’s get to chapter 6. The governess has seen the ghost of Quint, and is now telling Mrs Grove. 

““He was looking for someone else, you say—someone who was not you?”
“He was looking for little Miles.” A portentous clearness now possessed me. “That’s whom he was looking for.”
“But how do you know?”
“I know, I know, I know!” My exaltation grew. “And you know, my dear!”” 

How does she know? It doesn’t come from anywhere. 

““Never by the least allusion. And you tell me they were ‘great friends’?”
“Oh, it wasn’t him!” Mrs. Grose with emphasis declared. “It was Quint’s own fancy. To play with him, I mean—to spoil him.” She paused a moment; then she added: “Quint was much too free.”
This gave me, straight from my vision of his face—such a face!—a sudden sickness of disgust. “Too free with my boy?”
“Too free with everyone!”” 

Isn’t the possessiveness of “my boy” rather weird? (emphasis in the book) 
This passage also shows the annoying thing about Henry James—he always suggests, and hints, and never fucking says anything. I mean, play with him? Spoil him? What does that mean? With Mrs Grose talking like that, no wonder the governess lets her imagination run wild.
Or look at this: 

“I felt that I doubtless needn’t press too hard, in such company, on the place of a servant in the scale; but there was nothing to prevent an acceptance of my companion’s own measure of my predecessor’s abasement. There was a way to deal with that, and I dealt; the more readily for my full vision—on the evidence—of our employer’s late clever, good-looking “own” man; impudent, assured, spoiled, depraved. “The fellow was a hound.”
Mrs. Grose considered as if it were perhaps a little a case for a sense of shades. “I’ve never seen one like him. He did what he wished.”
“With her?”
“With them all.”” (Ch.7) 

Did what? With whom? Maybe there will be more details later. 
I’ve been thinking about the 1st appearance of Miss Jessel’s ghost. 

“Suddenly, in these circumstances, I became aware that, on the other side of the Sea of Azof, we had an interested spectator. […] There was an alien object in view—a figure whose right of presence I instantly, passionately questioned. I recollect counting over perfectly the possibilities, reminding myself that nothing was more natural, for instance, then the appearance of one of the men about the place, or even of a messenger, a postman, or a tradesman’s boy, from the village. That reminder had as little effect on my practical certitude as I was conscious—still even without looking—of its having upon the character and attitude of our visitor.” (Ch.6) 

Note that the governess cannot see clearly, and wonders if it’s a postman or a tradesman’s boy. Nor does she describe anything in the next paragraph that sounds like Flora notices the presence. 
Then all of a sudden: 

“…Then, as she released me, I made it out to her, made it out perhaps only now with full coherency even to myself. “Two hours ago, in the garden”—I could scarce articulate—“Flora saw!”
Mrs. Grose took it as she might have taken a blow in the stomach. “She has told you?” she panted.
“Not a word—that’s the horror. She kept it to herself! The child of eight, that child!” Unutterable still, for me, was the stupefaction of it.” (Ch.7) 

I have no idea where all that comes from. 
Maybe the governess suffers from a rich imagination.