Bubbles in line? Not a good idea at all. Bubbles can sting if they get into someone's eyes, and some people (my daughter included) are allergic to some of the ingredients that can be in the bubble mixture. Also, when accidently spilled, or dumped out, they make a slippery mess. Playdoh can be messy, and can stain clothing. And spray water bottles? Yeah, like a 2 yr old isn't going to get everything and everyone near him soaked?
Plastic kaleidoscopes (sp?) can be fun, especially with all the colorful stuff at WDW. They sell them at all the dollar stores now. But I second the idea of utilizing fastpass, getting there early, and spending a lot of quality time in line talking to the kids. Just engage the kids in conversation - talk about the parks, the characters, the people in line, etc. Count out loud, sing the alphabet, look for all the colors of the rainbow, play I Spy, look for opposites, etc.