Your 2 and 3 year olds will probably want light chasers for during the parade. Lots of little kids have them so they will want them too! So be prepared (these you can buy ahead of time at
Disney Store).
We do the pressed pennies. Save your pennies and quarters ahead of time and put them in the M&M minis container. This is really convenient to put in a fanny pack. There is nothing like searching for a penny or quarter when the kids want to do the pressed pennies.
Personally i like to get a Tshirt at the parks. I do not need any other knick-knacks, but I want a shirt. Last trip I didn't buy one

because I was sticking to my strict budget of money I made off of eBay. (DH said he didn't think I would be able to pay for the whole trip with eBay money and I was bound and determined to show him I could!) But now I regret not buying one. There is hardly a day that goes by that I don't mention this to DH. He says next trip I can buy as many shirts as I want!
If you need cheap souvenirs to bring home to family or coworkers, China had wonderful soaps for $1 each. They were rose petal and jasmine, etc. These are great little souvenirs. They also had cute silk screen fans for relatively cheap (~$2) that we bought for my girls to bring home to special friends. For coworkers, I brought home a can of Mickey Coffee and Mickey shaped sugar cubes. They loved the coffee but still haven't touched the sugar cubes because they are "too cute".
Overall, I think your kids are small enough that any "souvenirs" you prepurchase from home will satisfy them. When they get a case of the "I wants", just pull out a Tshirt you bought from the disney store for $7! I think your ideas of pennies and guest of honor badges are good to buy at the parks. Maybe also an autograph book??? Buy the Mickey ears from The Chapeau (I think that's the name of the store on Main Street) and they will embroider it with their names for free.
Maggie