I've been making sugar cookies for Christmas for years, and occasionally for other holidays/events. I've never heard of chilling the dough; my recipe does not call for that. When I roll the dough out I am very generous with the flour to keep it from sticking to the rolling pin or the counter. Some shapes can be delicate to frost and the cookie may break, so for little kids I would choose a large, easy to handle shape, and maybe roll the dough a little on the thick side to give the cookie more substance so it will be less likely to break while they are decorating (may need to adjust baking time). The frosting can be colored with food coloring if you want, but I usually just use sprinkles on the white frosting. The frosting will harden, so if you don't use it right away, make sure it is tightly covered and refridgerated, then just beat it again before you use it.
Soft Sugar Cookies
1 cup sugar
1 cup shortening
2 eggs
1 tsp. vanilla
1 tsp. baking soda
2 tsp. baking powder
3 cups flour
4 tablespoons milk
Preheat oven to 400 degrees.
Cream shortening and sugar together.
Add eggs and vanilla; stir in flour, baking soda, and baking powder.
Add milk until dough is sticky.
Generously flour work surface and rolling pin, then take out a portion of cookie dough and roll to desired thickness (usually 1/4 inch). Cut rolled dough using your choice cookie cutter. Place cookies on ungreased baking sheet about an inch apart (they don't grow too much). Bake in 400 degree oven for about 5 minutes, cool on the pan for a minute or two, then transfer to wire cooling rack to cool completely before frosting.
Frosting recipe:
1 lb. confectioner's sugar
1/4 lb butter, softened
1/8 tsp. salt
1 tsp. vanilla
3 or more tbsp. milk
food coloring (optional)
Cream 1/3 sugar with butter and salt.
Blend in vanilla, food coloring if using, and 2 tbsp. milk; add remaining sugar.
Mix until smooth, adding additional milk if needed to incorporate all of the sugar.
Once frosted, allow cookies to sit at room temperature for at least 30 min to allow frosting to set. If using sprinkles/candies, add them directly after frosting the cookies to make sure they stick to the frosting. Store the frosted cookies in layers separated by wax or parchment paper and covered tightly.
