Why not take this opportunity to turn the focus away from gifts? The crafts idea sounds fun but a game night sounds even better. At holiday get togethers, we play games as a big group which involves both the kids and the adults. On Thanksgiving, we played Catchphrase and it was hilarious. It brought way more connectedness than the two minutes it takes for kids to open gifts.

We no longer do a gift exchange with our nieces and nephews. It got too be too much about the gifts so all of us decided to stop doing and instead focusing on just spending the holidays together. It has been great, and I know my kids will remember playing games better than they will remember opening some toy from one of their cousins.
OP, I think its a good idea to have things the kids could do, like crafts, or a gingerbread house, etc, but I bet a bunch of board games and Christmas movies would be just as good.