Old blocks are delightfully seaworthy. You and your deckhands can glue, paint, and decorate them, and -- splash! -- one plaything becomes another. Accessorize your vessel using household items with undiscovered nautical potential. Man made his very first boats from wood, so you are upholding ancient tradition while at the same time recycling.
To outfit a whole marina full of speedboats, yachts, clippers, and dinghies, just add odds and ends from around the house. Pick items that are already waterproof: Make a smokestack from a tub stopper; cut a sail from an overnight-mail envelope; fabricate a fishing net from an onion bag. As for where to set sail, ponds and streams are good for expeditions, but the tub or kiddie pool can also offer a fine day of leisurely sailing. Anchors aweigh!
Saw and Drill: A parent should do this step. Clamp a block to a work table and saw off two corners to form the pointed bow. Set aside one corner scrap to use as a keel. Saw a chopstick to mast length. Use a very small drill bit to make two or three holes in the chopstick for attaching the sail. With a bigger drill bit, make a hole in the top center of the boat (not all the way through) to hold the mast.
Sand: Smooth the rough edges of the bow. Be sure to wear a dust mask. It helps to tape down a piece of sandpaper and rub the block back and forth on it. Also sand the keel.
Glue: Using wood glue, glue the body of the boat together first. Then glue the keel to the bottom and the mast into the top hole. Wipe all excess glue and let dry completely.
Paint: Paint with two or three coats of nontoxic water-based paint (Liquitex "Glossies" brand works well because it's waterproof), letting the paint dry between coats. Paint on decorations such as racing stripes, portholes, and a carefully chosen name. Working in a well-ventilated room, a parent should seal the boat with two or three coats of polyurethane (drying between coats) to make her seaworthy.
Cut a triangle out of a Tyvek envelope (like an overnight-mail envelope) with the fold along the long side for strength. Decorate with markers or stickers. Poke two to three holes along the side, and tie the sail to the mast with waxed twine.