J.P.
My son loves to play "marching band". We have a few instruments (the drum is the fave) and he will march around the house. Sometimes I'm in the band and sometimes I'm "watching the parade". He loves it when I clap & cheer wildly. The baby would probably like to watch it too!
Other things:
bowling (you can collect a bunch of toilet paper tubes for bowling pins so you don't have to buy anything)
red light/green light (add other lights that mean other things like blue for backwards, orange for jumping, etc.)
dance party (turn on the music and dance with stuffed animals)
hide & seek (he hides and then pops out to find me--he doesn't really get how it works just yet! but he has fun)
Start her with kid scissors. I just have him get paper out of the recycle bin and he starts making little cuts. At first I had to hold it for him but now he can do it himself. You can also get a box of scraps, feathers, etc. and do some gluing
Here's a cool website: http://kidscraftweekly.com/