The vaporetto runs frequently to the island of Murano, where all Venice's glassblowers have their workshops. Once on the island, bypass the hawkers and look for signs for free glassblowing demonstrations. Seeing blobs of molten glass become fragile goblets, vases, and works of art is mesmerizing for any age. You will be funneled into showrooms after the demonstration, but are under no obligation to buy.
There are lots of mask workshops who offer lessons but my favourite is Peter Pan Masks near the San Stae vaporetto water bus stop.
Make a good list for a treasure hunt. Here are a few ideas to get your list started: a lion with a closed book (meaning that Venice was at war), an ambulance, a garden, a pointed window, a golden lion, a well, a door that opens into the water, a horse, a saint, an angel, a dragon, a singing gondolier, a grocery store on a boat (you'll find one just off Campo San Barnaba by the Ponte dei Pugni), a leaning tower (San Stefano, San Giorgio dei Greci, and others), a bride in a gondola, and a gelato stand (everybody will be looking for this one).
If your little ones need to run off some steam there is a great little playground in the Sant’Elena park near the Bienale Gardens in Castello. The park has two play areas – one for young children and one with a climbing frame and mini zip wire for slighter older kids.
We took our 2 year old to Venice last July on a cruise.
Bought a red tour boat ticket- hop on/off. We didn’t queue or pay for anything else besides food. We traveled down the grand canal to st Marks Square, walked the canals, had amazing gelato (can’t remember shop name but it was the best ever and v close to realto bridge). Then we went to Murano island. Had lunch there by the canal. I thought it was very cheap and food was good. From memory 3 course and aperol spritz was 20 Euro ish. Got boat back to cruise terminal. Couple of hours to spare. Very easy day trip despite child and buggy. But we didn’t actually go inside any attractions.
For lunch with kids in Venice, I wouldn't go for a sit-down meal in a restaurant, especially if you're just going for a few hours. There are loads of friendly, reasonably priced little cafes which offer pizza by the slice as well as fresh, homemade pizzas with a choice of sauce and toppings. We've been to Happy Pizza a few times. They often do bowls of pasta, salads and amazing bruschetta. There isn't anywhere to sit, I'm afraid you'll have to take it away, but it's never a problem finding a nearby bench or steps to sit on! A slice of pizza followed by gelato.... heaven.
I was just about to say don't bother with the Lido unleaa they're desperate to go to a beach. If you're only there for a day, it's very unexciting and nothing like the rest of Venice. The city is great for wandering around, with plenty of rest stops for gelato and pizza if they get tired. I agree with a trip to one of the outlying islands. We did Burano which is like a little fishing village with different coloured houses although they might be interested in Murano for the glass.