You can put up clear plexiglass barriers and then teach your 9 year old to keep an eye on the 3 and 5 year old. In a few years, when the 9 year old is too old to be playing on the balcony with the siblings, the 5 year old will be old enough to watch the 3 year old.

we have small deck as well and 3 yr old, i hung chalk board out there, small water table, and child size wooden picnic table fits under our outdoor table when not in use

You're going to need something attached to those railings to make them solid, no? I'd go for clear perspex so you can still see through. Or bamboo fencing for privacy, maybe.

As for seating, I'd run a narrow bench seat with cushions (upholstered in a waterproof fabric - maybe Mexican oilcloth?) along the back wall. Supplement that with some folding chairs (IKEA has cheapies) that can fold up flat when not in use.

Since it's a shared area, a lot depends on your neighbors and condo regs. Also, on what your kids are interested in. But...

To prevent dropping things there are several options:
1)Tempered glass or plexi panels unobtrusively attached to the railing
2) bamboo screening (the kind that comes in rolls) attached to the railing
3) a row of planter boxes, maybe with some kind of trellising along the railing to make it difficult for the kids to get through.
4) If the above are too intrusive for your condo regs, then make an easily removable screen that you attach with velcro or clothespins when they are playing - you might diy one from some outdoor fabric or a dropcloth.

Seating for kids is all over, but assuming you can't leave the chairs outside all the time, quickly look for child-sized folding lawn or beach chairs being sold now in end-of-season sales. And tuck them away someplace when not in use.

"Teach your 9 year old to keep an eye on the 3 and 5 year old" - are you crazy? A grown woman couldn't stop Eric Clapton's three-year-old pitching out of a skyscraper window. It is irresponsible to even suggest letting children play out on a balcony unsupervised. If they play out there, a parent or responsible adult has to be there with them. Personally, I don't see why they can't play in an areas just inside the balcony, with a child gate or similar across the open doorway. That way they get the fresh air and sunshine they need without placin them in mortal danger.

I think you're overreacting. At no point did I ever mention that they were to be unsupervised.

I would try the plexiglass. I lived in a high-rise with my then 9 year-old and she was allowed on the balcony alone with no problem (I watched closely), but the neighbor's 7 year-old climbed onto my balcony and into my bedroom (I left my door unlocked while taking a nap) and scared me so badly I moved a couple months later. Kids are not predictable--and this little girl told her parents she had been sneaking into my apartment most afternoons to play with my cats. Creepy.

We live in a 1200 square foot condo with a 3.5 year old (and one on the way). We have a second story deck, and ours is about 6 feet wide by 10 feet long. To make the deck more secure, we added lattice all the way around the railings. (Our condo association is about as low key as it gets, so we didn't run into any issues with whatever changes we wanted to make). It lets light in, but keeps my son safely inside the railing. On one side of the deck we placed a sand and water table. This year, we did just water and found it to be easier to keep clean, and somewhat more fun for our kid. Underneath the water table we stored outside toys like bubbles and sidewalk chalk in a plastic bin. On the other side we had a couple chairs and a small table for seating. It's not quite big enough to do much, but it's a nice place to get a little fresh air.

After safety proofing (I agree with the plexi-glass thread), I would ask the kids for ideas!! They may have their own unique ideas about what they would like in a play-space!
And in my experience, tents appeal to all ages-- maybe a collapsable tent that they could design together?

Here are two play-tent postings from AT:

http://www.apartmenttherapy.com/make-your-own-play-tent-a-beautiful-mess-176402

http://www.apartmenttherapy.com/flickr-find-handmade-play-tent-99232

You could also try canvas panels for safety, I've seen them used for stair rails. Also, this may or may not work but when I was 2-5 we lived in a second story apartment with a balcony. My parents out a sandbox out on one end, and I have lots of good memories of that with my brother. If it's shared, maybe not. But Young House Love just created a rock box for their daughter. I'm pretty sure we threw toys, too, but not every day.

Hey, I just wanted to add another view about older kids supervising younger kids. It's not all bad. I was the oldest of 5 and was very much a caretaker for the younger ones. Sometimes I resented being the default unpaid babysitter for everyone in the neighborhood and sometimes I was given more responsibility than I was ready for. However, on the whole, some of the best qualities I have as an adult and some of the things that bring me the greatest joy and satisfaction in my adult life can be traced back to that responsibility.

I know it's not this way for everyone and a great deal depends on luck and the kind of parenting you get overall, but teaching a 9 year old to take some responsibility for younger siblings is not automatically a bad idea.

Praise be you're not my neighbor!

One suggestion is to buy a bunch of painters tape and they can use it on the floor to make tracks for cars, hopscotch etc... The possibilities are endless and temporary. A plexiglass screen can also be an easel for painting - just wash the paint away and start over. A set of wash tubs can be stacked together for storage, but great fun for water play with scoops, and can serve as tables or chairs if strong enough.

I would think about multi-use stuff as much as possible.

I don't have any suggestions, sorry
What is a water table?

Love the plexi-glass idea. I instantly thought of that, but couldn't think of what that stuff is called.

What about discreet washi tape on the flooring (and even on the plexi glass)? I don't know how weatherproof it is, or easy to remove, but you could make some awesome little roads/cities/abstract areas for them, depending on their interests and how well they play together. For example, sometimes I find creating a little "space" for each child can work better, so they don't fight over the Lego or something...other times, shared spaces are fine.

For seating, what about simple giant floor cushions and rugs that get rolled up and get stacked just inside the door in a basket, and teach the little ones to put it away each time they are done playing out there. I would be inclined NOT to have any raised seating, given that is is a balcony...and toddlers are natural climbers.You can get really cool small rugs, so they each have one that is "special" to them, and define a spot in washi tape where they can lay it out, if they squabble about that stuff.

CreativePhx- this is the water table we have.

http://www.toysrus.com/product/index.jsp?productId=3927524&cagpspn=pla&pla=plat

Basically it's a stand up table at toddler height that can be filled with water, sand or whatever other sensory stuff you want, and they can play with toys, buckets, shovels, etc.

The only balconies I ever lived with had strict rules about what could or could not be there, and no ongoing play area stuff would have been allowed. And DEFINITELY no tampering with the railings or the uniform appearance of the railings... But that was my experience and maybe where you live, there are more options.

One almost invisible barrier you could use to keep toys on the balcony (except for those deliberately tossed over the rail, of course -- and it WILL happen) is bird netting. It's pretty cheap, could be secured onto the rails with wire or a bunch of those plastic cinch ties or something, it's reasonably sturdy, it might even be enough to keep a small kid from falling. And it's black, about the spacing of traditional chicken wire, so from a distance if stretched tight, it's hard to see. (Garden centers at places like Home Depot have it.)

We have a covered balcony play area for our almost 3 y.o. She can't be there unsupervised, but it has still been a great space for her. We've taken care to keep items she could climb on away from the railing area which was a challenge when creating the spot; in our case the enclosure is solid and about four feet high. Ours is also tiled, with a skylight, and has a water faucet (all helpful features). We have an easel with white board, chalkboard, and paper with foam tiles underneath to minimize paint mess. We also have an IKEA kid table and two chairs where we can set up tubs for water and sensory play. We cut a piece of plexiglass for the tabletop - nice for finger painting and other fun. We have art supplies that require adult assistance in a PS locker and accessible creative play items in Trofast bins. We also put up a magnet board with spice containers filled with feathers, stickers, crayons, magnets etc and a rail with buckets for dot paints, chalk, brushes. There is also a line for hanging up finished art. At the inside edge we squeezed in a bistro table for the adults who are outdoors on supervision duty. Although we have a relatively large backyard we find that the balcony gets far more use since we live in the rainy PNW. She spends at least an hour a day, and often longer, out there. Low windows, balconies, and the like are all fall risks for children. Nothing can replace vigilance, but it shouldn't eliminate fun....we couldn't make structural changes since this is a rental, but we've made it work.