My wife & I went to Universal Studios/IOA with our 5, 8 & 10-year-old boys last summer, and we found plenty for little kids to do.
The five-year-old would have gone on the E.T. ride all day if we would have let him.
I was surprised how much we all liked the Toon Lagoon area with Dudley Do-Right's Ripsaw Falls (a flume ride with great theming), a playground based on Popeye's ship and the Bilge-Rat Barges (a whitewater ride featuring a comic battle between Popeye and Bluto).
Dr. Seuss Land was very popular with the youngest one. I would avoid the Cat In The Hat ride if getting spun makes you sick. The "If I Ran The Zoo" playground was fun, though. And the there is an elevated trolley train that is nice and sedate.
There was a live Barney show, but I couldn't bring myself to go to that. My wife took the bullet on that one.
And we stumbled across what turned out to be one of our favorite things. Deep behind the Curious George area is two-story building full of sponge rubber balls. It was loud and raucous, but it's shady, and has a lot of moving air to help beat the heat. My boys could have spent hours there. They especially liked trying to shoot me in the ear with the balls.