There isn't any lore to Paimon except for the fact that the traveller saves her from drowning one day. Paimon does consider herself as the traveller's guide and she does a decent job at it. There have been many theories that Paimon is actually an unknown God there to trick Lumine or Aether. They say she was sent there from the abyss twin to show the good twin how cruel Teyvat and the other worlds are. But that doesn't make much sense since Paimon has been there since day one and the only one helping the traveller and she's only a kid. But if it is true, many fans are going to feel extremely betrayed and hurt since most people have an attachment to Paimon. We also know that she does not have a vision and often gets called "Floating Child" or "Emergency Food".
Paimon is sort of annoying, but she's extremely helpful. Paimon usually accepts commissions when the traveller declines and some people think she's annoying for that. But Paimon has a sort of kind heart, though she does the commissions and quest for the hope of finding treasure and gaining power. Besides that Paimon is truly kind and willing to help out anyone in need.
Her only friend to be honest might be the traveller and maybe Amber. She gives everyone she meets an ugly nickname that she continues to call the for the rest of the quest. From one of her and the traveller's conversation we find out that Paimon considers herself to be the travellers big sister because she flies and the traveller walk. The conversation was about older sibling and younger siblings relationships.
Paimon doesn't really have a goal because she's a kid, but helping out the traveller is one of her main concerns. She eats a lot as well and often gets the traveller to cook for her. In one of the world quest we sort of see that she really admires the traveller's cooking and thinks it's the best she's ever had.
Paimon is one of my favorite characters in the game because my brother hates her. It's funny how mad he gets over an helpful character, but then it might be her voice because she has a very high pitched voice.I also like her because of her and the traveller's relationship. Paimon sees them as a little brother/sister even though she's way smaller than them. I also love her because she actually helps the traveller unlike most other characters that say they are but never did. The Knights of Favonius say they will, but the players never get to see that happen. She also cares about the traveller and actually worries if they get hurt and she's always the first one there when the traveller needs some support.