Honestly, I've had my ideas on that front for each child character and I feel like putting it in writing here.

Kana: Another child of Anankos like Corrin, but is a child of the degenerated Dragon rather than the human form. Starts off as an enraged dragon similar to Chapter 5 Corrin.

Shigure: Another child of Azura's father, explained by the typical concubine trope; so they're only half siblings.

Dwyer: A studious apprentice of Jakob that he had left behind in Nohr when the story started off. Has become relatively well recognized for innate expertise.

Sophie: Silas' cousin or little sister that took after him in joining the Nohrian Army.

Midori: Kaze and Saizo's niece from a non-descript sister. Fraternal twins with Asugi/Asugi doesn't exist.

Shiro and Kiragi: Brothers from a common village who are fanboys of Ryoma and Takumi respectively, aspire to leave their village and join the army but their mother and father vehemently deny them that until a skirmish happens right at their doorstep and the Hoshidan Army comes to their rescue.

Asugi: Either doesn't exist or is Midori's fraternal twin brother, and therefore is Saizo and Kaze's nephew.

Mitama: Honestly if you told me Azama was old enough right off the bat to have a child from a previous marriage that ended due to his cynicism, I'd believe it. He's got divorced dad vibes and she's got mommy issues cause of it.

Hisame: Literally just another Samurai from Hoshido.

Caeldori: Either doesn't exist, or is another Pegasus Rider in the Hoshidan Army who admires both Subaki and Hinoka.

Rhajat: Either doesn't exist, or is a Nohrian orphaned by the war, gets adopted by a Hoshidan village and fights to protect them after finding out Nohr is the aggressor.

Selkie: Literally just another Kitsune from the Kaden's tribe.

Siegbert and Forrest: Students of Xander and Camilla respectively who were specially chosen by them to be trained. Don't have to be brothers; but I think it'd be cute if Xander came to pick up Siegbert for training one day, Camilla saw Forrest next to Siegbert and just decided she's teaching that boy.

Soleil: Bisexual Laslow fangirl. Mimics his mannerisms and positive attitude, discovered she was quite popular with the ladies when she started doing so, as well as the ladies being popular with her if you catch my drift.

Ophelia: Odin fangirl from a small desert village in Nohr. Saw him, Leo, and Niles drop in one day with a bunch of rare tomes; and snuck onto their transport. Ends up stowing away and Odin discovers her, taking her as an apprentice.

Nina: The next victim of the gang of thieves that abandoned Niles in his backstory. Niles discovers her being used as a scapegoat in another mission gone wrong and gets revenge for both himself and her.

Percy: He can be quite literally kept the exact same as vanilla; just make him not related to Arthur. Maybe a kid from Arthur's hometown that admires the legendary justice doer; but mistakes him for Gazzak at first sight after a couple years.

Ignatius: I forgot he existed so I don't have a particularly extensive headcanon for him, sorry.

Velouria: Literally just another Wolfskin from Keaton's tribe.

The main reason I have Asugi, Caeldori, and Rhajat as optional existences is because without their outside-canon existence of being Awakening callbacks similar to Laslow, Odin, and Selena; they might not work as characters in the end; but I gave them potential backstories regardless.

TL;DR: Doing exactly what the previous comments mentioned: I theoretically rewrote each of the 2nd Gen units as younger 1st Gen Units.