I run a knitting club for adults, I have been so surprised by how long they have taken to pick it up, I hope your children are faster. For a couple of them it took two whole 2 hour sessions to learn to cast on! One spent six weeks knitting just six rows, because they had to be unpicked so often. I'm guessing that you will come across similar problems, as I have taught classes of children to sew years ago, they will all be at differing stages. If you go the dishcloth route, I suggest coloured yarn, they do like colour.
The adults tried to run before they could walk. They came armed with all sorts of expensive lacy scarf and cushion kits. Most have ended up making garter stitch, moss stitch or ribbed scarves. A couple are making cushion covers. A couple more are making very short scarf/snood things that fasten across with a popper and a button. One ambitious lady is making a long waistcoat, another has learnt to knit squares diagonally and is making her twin girls blankets for their dolls prams.
You may find that they have their own ideas about they would like to make, I taught DD and DS when they were younger than yours, and DS wanted to knit a superhero outfit for his Sweep. (As in Sooty)
We started in mid January, fifteen of us. Last week I actually managed to get some of my own work done, I only had to spend perhaps twenty minutes picking up dropped stitches and losing made stitches. I felt quite proud of them! They all have good tension now, too.