I made some Christmas ornaments for my grandson (21 months at the time) using scraps of fabric cut into 5" squares, back to back. I used the 'birthing' method to put the scraps together and inserted a loop of red ribbon for the hanger.
They are kid proof, so no chance of the child breaking the ornament or ingesting ornament stuff. The smaller children will still need adult supervision with this important task, of course.
For extra interest, I bought some jingle bells and put one in each ornament. He had fun putting them on the tree and even more fun taking them off. I had fun supervising him!
If you put jingle bells in the ornament, I recommend that you get larger ones as the small ones make very little noise. Unless, of course, you prefer less noise!