What's that?

Lily is using a number of phrases, and seems to pull a new one out of the hat every day lately, but none is more refreshing or (at times) more confusing than this one...."What's that?"

What's refreshing is that you realize how inquisitive her mind is.   I'm sure she wondered about the sounds she was hearing and things she saw before, but now she can ask about it.   It's because of this that I really treasure the question and want to give her as in depth an answer as is possible.

What's confusing is figuring out what 'that' is.  She'll repeat the question when (I assume) she doesn't get an adequate explanation.   So, a typical conversation goes like this:

L:  What's that?
M:  A car
L:  What's that?
M:  A car driving by
L:  What's that?

M:  Do you mean the sound?

L:  Uh huh

M:  A car driving on the road outside of the house
L:  What's that?
M:  Remember when you looked out the window and saw cars driving on the road outside the house?   There is another car driving by right now.