I built a slow-action graphite rod. Weight is a primary issue with young kids, so graphite is the way to go, IMO. One could build a rod smaller than I did, but kids generally like things as big or "bigger than Dad's", so that was part of my impetus for the longer rod. Smaller rods could be interpreted as lesser, or as a toy, rather than something like Dad's (or Mom's).
But I agree that slower action is generally better for learning, so I used an inexpensive graphite I or IM6 blank. ($45 back then--7 or 8 years ago.)
When the kids got a bit older, I had them use a 7-foot graphite rod for casting, then a 7'9" rod that I intended for myself.
Now, at ages 14 and 13, they are still fishing, especially with "real" 2-handers--my daughter with a 13-foot rod and my son with a 12.5 footer. Test-casting rods this weekend, I was surprised my daughter could handle a 10 foot 7 wt single-hander pretty well--her hands are so tiny, I didn't think she had the hand strength, but she was throwing some nice tight loops.
So, I consider the original rod a success. I'm the one who fishes it now, even though I haven't yet cut off the lower cork, because I enjoy the rod, and as a single-hander it's still a bit much for either kid.