THE CHILDREN IN THE WOODS by Frederick Bush (Fawcett Columbine: $12; 338 pp.). The characters in these short stories by the author of "Long Way From Home" seek to extract some small measure of happiness from the slag heap of contemporary existence. They marry, have children and strive to fulfill their expectations, yet something inevitably goes wrong. Describing her failed marriage, the narrator of "How the Indians Come Home," recalls, " . . . by then we were puppets on the fingers of our arguments. We were left with nothing to say. The arguments were having us. "