"That is SO weird, she never even rides a bike! And they call her Little Red RIDING Hood."
I tried to explain that it probably had something to do with riding horses and the cape she wore was a riding cape so that was the base reference to riding hood--blah, blah, blah. We're so used to the name we don't think about it, kids do.
What would you call her so it would make sense to kids? Anything I'm coming up with just falls flat.