My 5 year old and 2 year old are both covered in an itchy rash that originated on their stomachs. what could it be?

Allergic reaction: Either they have a viral illness, or have the same type of an allergic reaction. These type of allergic reactions can occur form something coming in contact with their skin, including environmental allergens, detergents, soaps, pet dander, food allergens, etc.

M.D. visit/mgt: From your description both your children have an allergic rash. I would advise an antihistamine, such as Claritin (loratadine) or Zyrtec for children, and following up with your pediatrician. I would suggest writing down all their soaps and lotions, new items of clothing, type of detergent and foods ingested within the 4 hour window prior to the rash. This will be important information for your pediatrician.