To be specific, the M&G is next to Pinocchio in what used to be a corner of the Village Haus restaurant (its the same place where the Rapunzel M&G was in the past).
They hand out the 'fast passes' (they are not tied in any way to the actual fast pass system) just a little beyond the actual M&G queue area. The queue goes in front of the Village Haus restaurant toward the Thunder Mountain Trail.
This past Sunday (8am park open, no EE/MM in DL), we got to the park around 8:30 and headed directly to the "fastpass" line. We arrived via the Monorail (we were coming from DLH and there was zero line at the DTD station so we hopped aboard) so I went around Matterhorn into Fantasyland. I'm not sure if there were any signs on Mainstreet directing you where to go since we didn't come in that way. We waited maybe 10-15 minutes in the line to get the return ticket. Our return time was 2:20-2:40pm.
You must have ALL tickets/APs for anyone in your group who will be coming back for the M&G when you get in the return pass line. They will scan each ticket/AP and give you a return pass. You even need a return pass for infants/toddlers in a stroller that don't have a park ticket. That said, all those people don't have to be present, one person can wait in line with all the tickets. When you come back for the M&G at your return time, they will look at your return pass and again scan everyone's ticket.
When we returned for our window at 2:25, we waiting approximately 10 minutes in line then had a lovely M&G with Anna & Elsa. My 2 DDs were thrilled