In this paper, we investigate the performance of spectral and energy efficiency (EE) of cell-free massive MIMO (CF mMIMO)-aided URLLC system with short blocklength communications. The conventional finite blocklength coding rate is commonly used in URLLC regime, while it is only applicable to moderate-to-long blocklength regime, typically greater than 200. To overcome this issue, we first derive the novel error probability and achievable rate that provide more accurate performance characterization by considering the effect of short blocklength transmission, mathematically expressed by the third-order term, and then derive the asymptotic spectral efficiency (SE) with a scalable power allocation scheme. A significant challenge in deploying CF mMIMO for URLLC is managing the heightened energy consumption while meeting the rigorous latency and reliability requirements, thus the EE based on the realistic power consumption model is analyzed, which can be used to depict the influences of both URLLC targets and system parameters. Simulation results show the asymptotic behaviors of the derived results, and quantify the impact of the URLLC targets, system parameters, and network architecture on the SE-EE trade-off. It is confirmed that there exists performance gap between the derived results and the conventional ones under short blocklength communications, and the overestimated SE and EE can be observed if conventional results were used. Moreover, under short blocklength regime, the EE degrades drastically as the latency constraint decreases uniformly. Finally, the cell-free architecture can better support URLLC traffic compared to the co-located one but at the price of higher power costs.