One great way for kids to decorate a picture is by using buttons. You'll need to add the outline and the glue but they can add the buttons to make a really neat picture.
Here are some great examples:
Button Letters
Button Trees
Good for ages 5 and up
Craftulate makes fish, flowers, hearts and butterflies.
Mr. printables has some really cute and colorful templates your kids can embellish to create their very own bathtub submarines. Each template has spaces to add animals and pictures. After they add their own touch to them simply place them within a clear plastic bottle for lots of bathtime fun.
The imagination tree has a fun way to play with paint -- using a fly swatter. Kids will have fun swatting the paper. They suggest making fly swatter flowers, but we guess kids will just love swatting the paper in general.
Craft project ideas has a great tutorial for little girls -- creating a feather wand. All you need are some popsicle sticks, paint, feathers and glue and bing you'll have a wand.
Reading with kids has some really neat color by number printables. Each letter is completely different from puzzle pieces to triangles. They also have color by letter coloring pages as well.
Play at home mom llc has a different alphabet exercise using stickers instead of crayons the kids place labels into the dots of letter templates to exercise fine motor skills.