As a teacher, I know that it is very difficult for kids to do fundraisers, esp. in a small town. I agree that selling things is really not that great. Some things that have worked really well in the past are:
1) Have teachers/staff/students at the school pay to have their cars washed/cleaned of snow at the end of the school day. This works great because it is sort of a captive audience. I gladly payed $5 several times to have my car cleaned and ice removed by fundraising kids. The kids just take license plate numbers down and trudge out the lot.
2) Pay for service -- in the spring, several kids went around to local churches, businesses, and schools offering to plant flowers. Basically, the business or whatnot buys the flowers and the kids plant them. Helps if you have a parent volunteer with an eye for plants and bedding layout.
3) Singing telegrams at any holiday -- yes, Halloween, Christmas, Valentines Day...helps if your kids have a little musical talent, but can also be very funny with kids who don't and are willing to make a joke out of it. We did ours during student lunches -- kids just went over to the telegram receiver table and belted it out. Teachers were ambushed after class. Parents were usually done at home during the evenings. Basically how it works is students/parents/teachers buy a telegram for someone they know, and the kids deliver it at the appropriate time.
4) Bake sale during parent/teacher conferences. Or sales of kid friendly dinners during the same. This works well if your conferences run late and they are the only food available.
5) Also popular is on-site babysitting for little kids during conferences and games. Ask your school if they would be willing to let you set up a room and do "drop in" care. Note there are some legal issues you would have to cover with your school, as not all schools are comfortable allowing that. Otherwise, you can do "drop in" care at a house near the school, and advertise it in advance. Pizza and Disney movies usually make even a large crowd of little kids manageable, but parent assistance is a must.
Note that all of the above require only one thing -- free kid labor. In general, that seems to be the most profitable thing in terms of fundraising. Also, since most of the activities involve hanging out together, it really isn't a big deal for the kids if you don't make a ton of money each time.
Good luck and I hope your school manages to raise the money they need.