S.W.
When my daughter was 4 1/2 I got a "Trail-a-Bike" for us to ride tandem. It worked really well! http://www.trail-a-bike.com/ We used it until she was old enough to ride with me by herself (about 7). This way she was peddaling and not just sitting and we could go farther.
If you did the tandem with your older child on one of your bikes, you could look for a more baby-friendly seat for your little one to ride with the other: http://totcycle.com/blog/all-about-front-child-bike-seats...
More info from a biking family: http://totcycle.com/blog/baby-on-a-bicycle.html