If you truly want it to be kid friendly for backpacking it must be light weight. Most I have found that are popular with backpacking parents (ie, Deuter Fox 30) are over 2 lbs which is unacceptable to me so I've been focusing on daypacks.

My criteria are:
Under 1 pound
Must have some kind of hipbelt
Must have side pockets for water bottles (I detest bladders)
Enough volume to hold most of his personal gear
Must be adjustable enough to grow with him 2-3 years

I ended up purchasing an REI Super Nova for my smallish 5 yo son last year. It's flaws are:
* Volume is too small (they claim 10 L but that must include all pockets) as it could barely hold his rainjacket in the front pocket and sleep clothes, gloves, hat and fleece blanket and jacket in the main compartment. He likes it because the design looks similar to my pack (which weighs about twice his, 28 vs 14 oz).
* Can't fit 1 L bottles in side pockets. 20 oz bottles barely fit.

His total pack weight has been about 5 lbs, sometimes 6 while he carried a full bottle. We'll manage with it again this summer, but it's getting the boot after that. The only viable step up I see is the REI Tarn 18. It's over a pound, but looks like it has superfluous stuff I can remove to get it close. Appears to be larger, but it's obvious they're including the extra pockets since the Flash 18 has significantly larger dimensions (and no exterior pockets).

In all honesty, I will MAKE his new pack so I don't have to go through this frustration (or cost). Good luck on your project.