Definitely you can make pictures into photobooks online (look at photobox and register with them, then they'll send you special offers).
Don't bother scanning, except for text (eg a school report) as it takes too long. Just take pictures with your phone. Before you start though, get out your oldest dc's stuff and sort through it... Then you can go through it in categories, so have all their eg first paintings in 1 place in front of you. Chances are 1 or 2 paintings will make you smile, others you won't remember them making at all! Pick the most special. Then repeat for the other categories. The ones you don't like, or remember, or just aren't as good, look at them and thank them. 'thank you for helping Sam explore colour /practice holding a pen' or whatever, then put them into the recycling bag. They've served their purpose by helping your child become who they are now and you don't need them.
When you've finished sorting all the categories put it all together and look at what you have now. Is it overwhelming /manageable? Does anything else need culling? If so thank it and let it go. If not, start making digital images, make it into a book, then let the hard copies go.
As you're making the photo books you can write text too, so annotate the pictures with your favourite memories of the children at that time. I can guarantee you that 1 picture of few scribbles and a carefully worded message about how 'little Sam was much more interested in taking the lids of the pens, or colouring in his fingers, so not much ended up on the paper!' will have much more meaning to them in the future than 50/100 random pieces of paper with scribbles all over will. You can use your diaries to help you write the comments.
For birthdays, arrange all the cards so you can see all the fronts, take a photo, then make a list of who they were from (with any special messages), so you can write it underneath in the photobooks. Then thank and bin the originals or let your dc use them for art projects.
Repeat for the other kids.
It'll be hard to start with, but will get easier as you go.
The problem is, by keeping absolutely everything, you are teaching your kids to be non selective and overly sentimental (at best) and to hoard (at worst). Your kids will not want to inherit an attic's worth of stuff and by having so much, it all becomes rubbish by default as there's so much that stuff will be damaged and also who can be bothered to sort all that? If you find it overwhelming to sort, so will they!
Lastly, let big stuff like cots go. In the future your dc will want to choose their own cots/baby gyms and technology will have moved on! There are so many threads on mumsnet about mils finding the family moses basket in the loft for the new grandchild and the prospective mother is asking AIBU not to want to put my precious baby in this mouldering heap covered in 20 years of dust and mould spores! Don't become that grandparent!
Even Duplo ages! I inherited lots that isn't even that old (10 years probably), but designs and colours have moved on! The old stuff looks duller and scratched. It wasn't 'worth' me buying new sets, as we had so much, but I was secretly quite sad as the new stuff just looks so much nicer. Have a look at the Lego website and think what you'd choose if you had a dgc, then look at what you have and see how it compares!
Keep very special books, but again remember the pages turn brown round the edges and will smell musty, so chances are your kids will want to buy new for their dc. Will they feel able to do that if you're standing there with a huge 30 year old collection, saying (or thinking) 'new books, you don't need those, you have all these lovely ones from when you were little!' You will be nostalgically remembering when your dc were little, but they may feel overwhelmed with the expectations that the nostalgia places on them. Maybe put them in a line and imagine if it was a charity shop/jumble sale, which would you buy for a relative's new baby. That may help you see how worn some really are.
Good luck op!