The Nishan Sahib is the Sikh flag, and a source describing family practice at Vaisakhi puts it plainly: a fun thing for kids to do is make their own, to carry in the parade.
A parenting resource describing Vaisakhi practice suggests exactly this: children making their own small Nishan Sahib — a triangular flag — to carry in the real Nagar Kirtan procession that many communities hold for Vaisakhi. It is a craft built around an actual, public use, not a display piece.
A triangular piece of card or fabric on a small stick or dowel, in the right colour, decorated by the child, is enough. It does not need to be identical to the flag used at your own gurdwara — it needs to be theirs, and carryable.
The real flag carries specific symbols and meaning that we are not going to describe here, and exact practice varies between gurdwaras. If your child asks what it means, that is a good question for your own gurdwara or family elders.
Many do, but not universally, and practices vary. Ask your own gurdwara whether and how Vaisakhi is marked publicly where you are.
That depends on the child and the setting — a parent's judgement on the day matters more than any age we could give.
Match it as closely as you reasonably can, but a child's handmade version is not expected to be identical to the ceremonial one.
Part of our guide to World calendars & interfaith families.