Which are reasonable concerns, she's looking for answers to all the right questions, and Altarrin desperately wishes they weren't the right questions, that her fears were unfounded and he could prove it to her - it wasn't like this two hundred years ago...
It was a lot worse fifty years ago, though, when he was working his way up, supposedly the mage-gifted and very promising son of a minor noble, sent to foster (or be a hostage) at the Palace with all the other noble children - an unfortunate practice that swung up during a gap a few lifetimes ago, when he had inconveniently reincarnated all the way down on the southern coast and needed to travel overland as a visibly half-Haighlei twelve-year-old. (Which had also given him a lot more challenges in establishing his credibility here.) But fifty years of work, and his hand in selecting the current Emperor, have at least helped. She will be safe here, because nobody manages to cross him and succeed anymore, but - it's not unlikely someone will try.
He can try to explain some of it, at least, and - arrange for the servants who attend her to be ones inclined to gossip, and eager to talk to an exotic stranger? He suspects she can garner quite a lot from idle servants' chatter.
"For now," he says, "you are officially my political prisoner, and I need not explain anything about why. With the level of precautions and restrictions on your movements I will impose - which I think you will not find too onerous - and since you are visibly not local to the Empire, other players are likely to assume at first that you are a merchant who tried to deceive an agent of the Empire in trade, or something of equal severity. They will expect that I intend to use the leverage I would have over you, if that scenario were true, in order to persuade you to work for us. I will be arranging to send you books on our history and our magic - hopefully your magic will let you read them - but in any case, relevant people will infer that you are a mage, that you are clever and not to be underestimated, and that I intend to make use of your talents. There are definitely several players who will be considering how they can turn the situation to their advantage, but given my reputation, I think they will bide their time and try to learn more. - You ought assume that anything you say or do in front of servants will reach the ears of someone - though different servants report to different nobles, and are varying degrees of loyal, so the individuals in question will perhaps end up with rather a patchwork picture."
He sighs, slightly. "Of course, it will become apparent in not too long that your magic is different, and going to be transformative. At that point, I think there will be - a scramble to plot something - and we ought consider how to make the announcement such that the scramble is to my advantage and does not put you in danger. Does that make sense?"