Anyone know of any materials that could be used for this.. around a
swingset etc..

Ive found kid kushion at 2.5" for $26 for a 2x2 tile which is good for
6 feet.. but this is really expensive, even if I did just around the
clubhouse area that would be minimally 10 tiles if not more.

Any thoughts on alternatives?

I dont really want mulch.. I'd rather have my 1 year old eating grass
than rubber or bark lol

Thanks