This setup works:
One of your items is an arrow, the other is any non-dispensing item like redstone.
Arrows will fire and miss the tripwire. Items will hit it then burn up, triggering a signal. You can use the items you suggested: arrow, cobble, cobble, arrow and the desired signal will be generated (well, the inverse).
For spawning purposes, the absolute best thing to do would be to fill the ravine with solid blocks. If I recall correctly, this makes the spawning algorithm give up on the space sooner so that you'll get slightly higher spawn rates elsewhere. However, that's probably not practical.
I would recommend simply lighting it up with torches, starting from the top down. Yes, there will be ledges on the side; such ledges are generally flat and lengthy, so you can deepen them by digging into the wall a little bit to have a continuous normal walking path, and light that up. As you light up the ledge you will start to get a better view of ledges on the other side. As a bonus you might find passages to other caves you'll want to light up.
The reason to go top down is so that you don't have monsters falling on your head. The particularly problematic ones are creepers, which in recent versions may instantly explode if they drop from a height next to you. If this particular ravine does not have many ledges, or there are many spawning spaces outside of the ravine, it may be safe enough to light up the floor first; this will get rid of most of the spawn area and so you'll get fewer skeletons shooting you while you deal with the ledges.
I would not recommend using lava or water as fill, because they will make things inconvenient if you later decide to build some underground structure that just happens to intersect the ravine's location.
No monsters, not even spiders, spawn on walls, so you don't have to light up sheer walls (or any part that is not a floor or a ledge).
Best Answer
You can use NBT tags on a tool to allow your kids to break certain blocks with that tool
Till give you a stone pickaxe that you can use to break stone and iron ore, even if you are in adventure mode, this pickaxe will also be unbreakable, which may be good in your case:
Use this if you want the pickaxe to break as it usually would:
This will give you a bucket that you can use to pick up water:
And this will give you a water bucket, where you can place the water on stone
Note: Some NBT-tags on a bucket will reset after using it, so I have not found a way to get a bucket that can pick up water AND place it somewhere else
I recommend to only use the first, or second command as it seems like this works inconsistently with fluids.