Confidence, seat and balance are key things to work on with kids. Position, hands, legs and all the rest are important but getting them comfortable with the horses movement, relaxed and sitting well is a good starting point.
Physical exersises like touching the ponies ears and docks (whilst retaining leg position) is a fun little competition and encourages them to lean out of the comfort zone and yet also concentrate on leg position.
Getting them to talk or answer questions or shout the arena markers is a good way to keep their attention, keep them breathing and encourage awareness of surroundings and distract them if they're feeling nervous about the pony.
Take advantage of your leaders and do individual work like all turning left and circling to change the rein. This will give the kids something individual to concentrate on rather than simply following the person in front, and is something they may not be able to do without the leader.
Do work without stirrups so they don't rely on them so much.
Incorporate some pony club games like cup on a stick or getting off and mounting from the wrong side - mix things up and keep them doing weird and wonderful things.
Don't worry about talking all the time - you may end up confusing them or making them switch off. Keep what you say short and sweet and clear. Be encouraging but keep pushing them - they may only be tiddlers but they are there to learn!
Get in touch with your local pony club to see if they have any ideas, or maybe if you could book one of their instructors to come along and teach to mix things up a bit.
Use your imagination and remember what you found fun when you were a kid.