An adult sim must go to Magic Town and buy a Dragon Egg from the Vendor called Vicki Vampiress. The Dragon Egg, once hatched will produce a dragon. If you keep tickling the dragon, it will give you dragon tears.
Also, if you keep grooming the dragon, it will give you dragon scales. However, the dragon will eat all your flowers and occasionally set fire to things, but it can be set free by an adult. Toadstools are obtained by buying the toadstool chair, and just sitting on it often.
If you get a Sim to sit on the toadstool, stand up, sit on the toadstool, stand up etc, before long a patch of toadstools will appear somewhere in your yard, for harvesting. More.
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