I, like finallyME, is working on this problem. I have a 9, 7, 5, and 2 year old. The five year old (who will be almost 6) will join the 9 and 7 year old this summer.

I have a CamelBak similar to the currently sold scout; the youngest (5-7 year old) has always used that.

I bought a Deuter Climber for kid 1 when kid 2 started coming. Kid 2 now loves this pack; kid 1 won't wear it b/c she wore it once when it was poorly adjusted.

Kid 1 is now probably the top end of your target audience; at 9 and 60lbs, she can carry a load (if she chooses) and now needs to. In fact, the pack I think you are trying to build is the niche from 7-11 years old, when we parents have to limit their weight to about 10% of body weight, and the kids are still going with their parents. Pack weight has to be as low as possible to solve this problem.

The Deuter Climber has more than enough volume to solve the problem. The issue is comfort, weight, and adjustability. IF you can build a comfortable pack weighing less than 2lbs that can adjust to fit a 1st-5th grader weighing less than 100lbs, you've solved the rest of the problem.

If you build a prototype, I think that finallyME and I each have test subjects who can tell you what they think.