I saw it at my daycare when I was little, and I can't remember the much. I remember there was a guy spray-painting "X"s on trees to cut down so a man operating a big machine could cut them down. He painted one really big, scary tree which sucked up the paint or something. When the guy cut it down, some black goop came out of the tree and started crawling through it (it was alive). It was singing and everything.

I think the main character was a girl who somehow shrinks and finds herself in a forest, and a fairy prince (lol) helps her, or that may be a different movie.

Sounds like FernGully: The Last Rainforest (1992) (http://www.imdb.com/title/tt0104254/) but it's a guy who gets shrunk down and meets a fairy princess I believe.

That's definitely it, thanks! I've been wondering about it forever.

Glad to help.