Making houses out of boxes - ds1 loves doing that! I just supply glue, boxes and various bits of paper, foil etc to decorate. He does all design etc. We end up with some ahem, 'interesting' architecture.
Making a beanbag or heat pad toy, you can gear up the finished article to suite their ages
fabric crayons or pens (crayons best at 4 as less likely to get onto clothes)
White cloth - more cotton than polyester - 50/50 at least
stuffing - barley is cheap if you want to make it into a heat pad - otherwise lentils or any other stuffing - even chopped up poly bags make good stuffing
Sewing machine or needle & thread - you will probably have to do this bit, at least for the 4 yr old - 7 yr old might be able to sew their own
Get the kids to decide on what they want to make -
for example at 4 DD made a ladybird, so I cut out a pair of ovals in the fabric, an inch bigger all round than we wanted it ti finish - this allows for stuffing to pad it out & make it smaller.
DD then used the crayons to draw & colour the shape into a ladybird - the underside fabric she just coloured in black - we used the internet to look at pictures of ladybirds top & undersides for inspiration, which she loved
once she'd finish, I ironed the cloth to seal in the fabric dye & helped her sew the 2 ovals together - leaving a hole - we used a funnel (make one out of card or toilet roll inner if you don't have one)
DD then poured barley into her ladybird until it was full - I sewed up the hole for her
She still uses it today for tummy pains etc
you can do all sorts of simple shapes, cars, trucks, doll, butterfly, cat dog - anything they can think of
I've found that the plain white masks go down great with kids of all ages - I've even used them as a School fete activity - add paint, glitter, feathers, sequins you name it - DD LOVES doing these & did when small too - & the boys tend to turn them into super heroes
Also the wooden lollypop puppets are very good & again suit all ages - again add paint, glitter, cloth etc etc - & then they can make a puppet theatre out of an old cereal box & put on a show - DD would spend hours on these
Have been meaning to make some sock puppets with DD (3yo) for ages. Have two odd socks (the other ones had huge holes in and got thrown away). You can make the face with anything you have lying around or go and buy proper googly eyes, felt shapes or colour with paints, felt tips, chalks. They don't have to last forever!
Or google some simple origami animals that you can help them make and then decorate.
Cardboard cutout mask stuck to a lollipop stick or even a pencil - decorate as you wish - put on a play afterwards. Or on the same theme you could make a theatre out of an old cardboard box and make little characters for the plays from pictures from magazines or just cut them out, attached to sticks etc to move them on and off stage.