Here's a site telling how to make a child's cloth book. For each picture you could have an area with some stiff plastic - even a report cover? I had these for each of my grandkids and they are just 3 years old so .. not that long ago. Got one on ebay and one at Toys R Us.
I'm sure anything you could make would be cuter!
http://www.ehow.com/how_2200013_fabr...-children.html