What I'm pretty sure that happens: The witch kidnaps the boy's romantic interest, turns a frog into a copy of the girl (who engages in suspicious behavior, such as eating flies), to trick the boy who invaded the witch's castle to rescue the romantic interest.
What I'm not so sure that happens: I believe that is explicit that the whole situation is happening in the boy's imagination, in a Mona: The Vampire style. I believe the boy's relationship with the girl is platonic.
I cannot remembers if is a short or long movie, or an episode from a series.
I watched it dubbed into Portuguese, between 2006-2011, replayed a few times, on one of the following Brazilian television networks: TV Cultura, TV Escola or TV Futura. From my memory, the animation style was Western, but it could be an Anime. It is possibly a European animation and more possibly from Eastern Europe, because at this time TV Cultura showed a lot of animations from the 80s from those places. I find it difficult to be American because of my difficulty in finding anything about it and because American animations were not common on these channels at that time.