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E-Ink displays are not very good at rapid screen changes. That said, you can do partial refresh/drawing to defined rectangles, if I understand it correctly.
Ereaders would not be a good choice, but there are tablets and with those you can have color (important for children's books) as well. You might want to look up/google the epub spec., "Sigil" an epub editor, describes adding video and audio files to an epub.
Luck;
Ken
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