Hey Carolyn.

The passage has two distinct and very rich sections. Theologically, the first section is "justification" and the second is "sanctification."

Section 1, Verses 16-17:  = We are made new
"New" here doesn't mean "perfect/sinless." It means, "fresh start."   Slate is wiped clean. No excuses. "Justified = able to stand up, set right, saved, re-born."  

Section 2: Verses 18-21  = What God was doing in Christ, and therefore what WE are supposed to do in Christ (what do we do to be sanctified).

Verses 19-20a are a famous "memory verse" ... a "mini gospel."
"...in Christ God was reconciling the world to himself, not counting their trespasses against them, and entrusting the message of reconciliation to us. ²⁰ So we are ambassadors for Christ...."  (I hope you have a children's Bible translation to use.)

I can see lots of visual images and motions that could be dramatized/re-enacted here.
God lifts us up, gives us a fresh start, wipes the slate clean, removes penalty/chains of sin, restraints of doubt/fear, ....so we can lift, break free, share fresh start with others.  -- help, stand, comfort, mourn with, make peace with, ...God speaks with us, so we can turn and do the same with others. (Sanctification = Pay it forward.)

Off the top of my head.... I could see an art project using mini dry erase slates (Amazon) that the kids personalize and take home. You'd walk them through adding drawing to their board --things like fear, doubt, sin until the slate is completely full and ugly, then pass a cloth that has a cross on it to wipe the slates clean, and then draw pictures of helping/sharing. Teacher or students could use permanent marker to add keywords from the verse around the slate's border: we are new, we are ambassadors (friends?) for Jesus.

Hope this helps.