There's a place in Menlo Park called Color Me Mine (on Santa Cruz, I think) where you can docorate various pieces of pottery and they finish it. I have also heard of quilts, or quilted pillows, made of outgrown baby/toddler clothes, used as the fabric pieces. Another idea is decorating directors chair with fabric paints. If you look in the fabric stores you can often find all sorts of ideas for these types of projects.

Mosaics are very easy to make, low costs, and you can have lots of helpers. Michael's art supply store has mosaic supplies. We did some a few years ago using pieces of wood for the base and referring to some books for instruction and ideas.

Also, just walking distance from College Terrace, there is Create It! on California Avenue. They have mosaics and pottery painting so you could do either and it would be a nice walking outing for you as a group.