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.