We have a lot of small toys for my 4 and 2.5 year old...mini My Little Ponies, Care Bears, Magiclip Princesses, Shopkins and Peppa Pig figurines in our rotation. I also bought some small Palace Pets for stocking stuffers!
My kids like using their Magnatiles or Legos to build stuff for their figures. They are building a potty, pool and school for Peppa & friends right now.
I don't have a good system for storage and I just put them into ziplock bags at the end of the day.
Does your LO have lots of small toys? How do you keep them organized?