I would also include, as part of the art/craft activities, lots of instrument making - drums, shakers etc., from things as basic as rice in a plastic bottle. There are many books on do-it-yourself if you need more ideas and you can be as ambitious as you like - right through to constructing basic stringed instruments. Then you can investigate how sounds are made - what needs to be banged, what works best with a violin bow, and, of course, use each of them to join in with your singing.
5 seems a little young to hold down chords on a guitar but why not start with a ukulele - the chord patterns are the same and the strings are gentler on little fingers. Then the transition to guitar is easy when the hands are bigger/stronger. I learnt that way, and so, apparently, did my husband.