Oaks Park is a small amusement park located in Portland, Oregon in the Sellwood area. They've got rides for every age. One area is set up just for younger children which is perfect for kids 2 - 7 years old. Most of the rides are what you would typically find at a fair or carnival. The best deal is to get your kid a wrist band that allows them to ride all of the rides for $16. If your child is too little to ride the largest rides then get the limited bracelet for $13.
They also have an indoor skating rink and putt putt. The skating rink hosts a preschool time each week.
For parents there are lots of benches for sitting!