+1 on the PPE. You may have to do a little hunting to get the proper size but it's well worth in terms of comfort and effective protection.
If you make it a habit of donning at least the eye protection as soon as you enter the shop, she'll pick it up and keep you honest.
Jim
This is absolutely true. My 7 year old is better about wearing his PPE than I am, but I always comply when he calls me out so he knows it's the right thing to do. Santa brought him a slingshot with ammo and a 12 pack of safety glasses in his size from Amazon. We might not always be able to find the pair he had on last, but always know where the box of more is.
He was really into Bob the Builder when he was younger. Bob sets a good example by always using his PPE, including his ear defenders. My son is very good about ear defenders too.
We have different categories of tools. There are some he can use without supervision (shop vac, broom, glue spreader, tape measure). There are some he can use with direct supervision (wrenches, ratchets, screwdrivers, hammer, drill press after I've set it up and clamped the workpiece, cordless drill and impact driver). There are some that he's not ready to use (power saws).
I promised him a while ago that I will eventually teach him how to use every tool in the garage when he's ready. He's pretty satisfied with using the vac to clean up for now. I made a clutzy move a couple week ago and pinched my finger in the tape measure as it was retracting. He wasn't in the garage with me at the time. It created a little blood blister on the side of my finger. I talked to him about it the next day and explained that even tools that seem safe can still hurt you if you don't use them correctly.
As far as projects - I think it helps hold his attention if he likes the idea. My son and I built a shelf for a place in the attached garage to store sports equipment and general **** that tends to collect. It has a bungee corded area for sports balls and a pegboard side where he hangs his baseball bat. He helped me design it in Sketchup. He was really excited about building that.
He and I are working on a tic-tac-toe toilet paper holder we saw on YouTube right now. You make the # board out of 1x6 with the spaces big enough for a roll of TP. Then you make some X's out of 1x4 or 1x6 to go in the other spaces. He really liked it so we're making it for Mommy and it's going to be a surprise. That's the other thing he likes - making surprises for Mommy. That helps hold his attention.
The next thing on our agenda is a corner cabinet for our breakfast room. It's a very specific space it needs to fit into. It will hold games, cards, and probably some of his books. We have some material to get started on that, but we've been working on the TP holder lately. Again, he helped me design it in Sketchup, so he already has some buy-in on it.
He and I have been doing the Home Depot workshops since he was about 2. He received the 50th star pin for completing the 50th project back in January. I enjoy doing it with him. He enjoys it. My wife enjoys having a little quiet time by herself while he and I are doing it. It's a win-win-win. The great thing is that the things are rugged enough to withstand a little kid playing with it.
Good luck...and post up some pics!