Board Thread:Spoilers!/@comment-24179430-20150301105158/@comment-24674051-20150420151841

I think that the whole "Love Interest" was just speculation, since at the time, Lily was described as a recurring character, and was cast as a teenager (near to Henry's age). Now that we know the young girl that Emma briefly befriended is, in fact, Maleficent's daughter, we should discard the idea of a Love Interest for Henry (at least for the moment). Just my opinion, though.

As for Lily having Children, obviously it is possible (given she is the same age as Emma), but I don't see that happening either. I think Zach is probably a young friend from the LWM that knew Lily (and or Emma, since Abby Ross is listed as a Guest Star for the episode).