Wet the chalk, it will last longer to rub on the hooves. Chalk is about as cheap as you can get, lots of colors kids like.
Egg whites with Wilton paste food color added, might be a safe recipe for hoof paint. Wilt on colors are very bright with only small amounts added. Whip the egg whites lightly to just blend the colors in, not turn them into a frothy meranigue! Or use liquid food colors, they are cheaper but not as bright. Probably want to experiment with mixing, painting on hooves to see color results, before turning kids loose.
The glitter hoof polish is pretty pricy, stays on well. Prices for any hoof polish have gone up for what you get.
Word of warning. If you find a safe “hoof paint” to make, any glitter additions will appear everywhere on your place! Dirt, stalls, your house, car, on children, pets and tack. Not sure how that happens, but the “fairy dust” sticks to everything for a LONG time!
Sounds like a fun day.