At the Clear Spring School we use these as axle pins for making toy cars and also for pins to secure pivoting lids on boxes.
Drill 1/4 in. holes in pieces you want to pivot freely, and 7/32 in. holes where you want the pin to fit tight.
I'll not show you anything further about this, as you can use your own imaginations or rely on the imaginations of your own kids. The point of course is that with a drill, some scraps of wood, and two sizes of drill bit you can build interesting things that move.
Kids love playing with blocks. The pins provide two additional things. Permanency to their creations, and the ability to have the things they've made move into new configurations. It's relatively cheap play, and so much more flexible and unrestrained in its outcome than builder kits less inviting of parental collaboration. The axle pins can be purchased here.
https://smile.amazon.com/Wheel-Axle-Hole-Dia-Tenon/dp/B000P9YCH8/ Through Amazon smile you have the opportunity to support the Clear Spring School.
A small drill press is useful in making various parts. A workbench with vise is important for keeping hands safe.
Make, fix and create.