Keeping them busy:
How about making cookies with the girls and then letting them decorate their own cookies.
I like your nail painting idea, that could work out real well.
Craft Ideas:
For the craft, why not have them make bracelets. You can buy boads fairly cheap and they can make their own jewlery.
Buy a white t-shirt of pillowcase for each child, then have them decorate it with markers or fabric paint. Then they can sleep on or wear their creation.
I hope these few ideas help. I will think of more and then let you know
