" L' " is a pronoun, it stands for "him", "her" and even "it", Here it replace the word "poupée", Here is a similar example: - Aimes-tu mon gâteau ? (Do you like my cake?) - Oui je l'aime, merci (yes I like it, thanks). Keep "j'aime ça" for when you say things like "I like it when..." ex. : J'aime ça quand tu me donnes des fleurs. (I like it when you give me flowers)