Penelo is a young orphan who is also a dancer. Exactly what kind of dancer is she? Seriously, someone write in and tell me. Anyway, she grew up with and is best friends with Vaan and joins the party through association with him. Of all the characters, she has perhaps the least connection to the main plot. However, some digging on the net reveals that she supposedly had an older brother who died in the war. If that's true, she has just as much reason to fight for peace as Vaan does.
Regardless of her reasons, Penelo is dedicated to helping the party. She's very sweet, kind, and generous. She's always ready to lend a hand and do what she can to help out. I wouldn't exactly call her bubbly or hyper (as many people have characterized her). She's kind and sweet, as I said before, but that doesn't automatically mean she's uber cheerful. In fact, I think she's somewhat calm and practical. She's seemingly intelligent and interested in learning more about the world she lives in as she explores it with the others. It's usually Penelo who asks questions about their surroundings, and I think this is because she genuinely wants to know more about what's going on, not because she's dumb.
Penelo is mature for her age, never distracting or annoying the group. Despite her youth, she almost seems to take on a motherly or "big sister" role. She seems to provide a source of comfort to the others. They all appear to have respect for her, never doubting her abilities or telling her to stay behind. They don't treat her like a child, and I think that's important.
Like the rest of the characters, Penelo doesn't easily fit into established Final Fantasy character types. She's the young, sweet girl, but she's not hyper, annoying, or loud. She's not immature. She's not overly shy or overly forward. In this regard she's more realistic. She's a simple girl caught up in a grand story, and for that, we can relate to her a little better.