It seems to be that the biggest conflict in this story is actually an internal one in the narrator himself, as his sense of romance, innocence and naivety is confronted with the cold, harsh realism of the final events of this tale. Note how the narrator describes his feelings for Mangan's sister, and in particular how he gives them religious connotations:
These noises converged in a single sensation of life for me: I imagined that I bore my chalice safely through a throng of foes. Her name spran to my lips at moments in strange prayers and praises which I myself did not understand. My eyes were often full of tears (I could not tell why) and at times a flood from my heart seemed to pour itself out into my bosom.
The extent to which he has taken his love is clearly shown here. It is so important that it has become something sacred to him, and his emotions rule him. However, when he begins his much-longed-for journey to the bazaar, it is clear that his dreams and imagination receives a cold, sharp shock by the reality of the bazaar. As the lights are turned off inside, he experiences a sudden epiphany:
Gazing up into the darkness I saw myself as a creature driven and derided by vanity; and my eyes burned with anguish and anger.
In the internal conflict between romance and realism, realism has won out and the boy leaves a wiser, if not sadder, individual.