It’s not creepy at all if you think of Jareth as a product of Sarah’s mind.
Isn’t that why they made it a point to use a popular rock star for the role? Jareth is what “grown-ups’ love” looks like in the mind of a 14-years-old.
I mean, if I was 14 and had to make up my ideal man, he would totally look like David Bowie and rock a shiny pantythose (ok, he still does and I’m 21).