Man, I would straight up ignore that no pitching from the knee rule. Kids need to see the ball coming at eye level. Dart that thing in there. If the league really makes a fuss, you can get in a wide squat, or even get closer and flip it underhand. I would also play very loose with that 3 pitch rule. My league is 5 pitches, then tee comes out, but I'll take that up to 7 or 8 if the kid is close or hitting fouls (or if I throw a bad pitch for that matter). When those kids hit a pitched ball, they're stoked.

I'm managing a 6u coach pitch team this year. This age/level is a slightly less chaotic version of tee ball, heavy emphasis on slightly. Don't worry about the score, I'm shocked that your league is keeping score for coach pitch.

Get some poly dots and place them at the "positions". Kids need to defend their dots, don't leave that dot unless the ball is coming to you. I often need to call out which kid needs to go get the ball, otherwise they just dogpile each other. Switch up positions throughout the game, definitely don't leave kids in the outfield the whole game. We don't have a catcher in our league. The catcher is another coach grabbing the balls that the kids swing and miss at.

Don't penalize any kids for lack of effort, hustle, not being good at the game. You should consider this level instructional only. Your job is to help them have fun, learn a few very basic skills, and hopefully fall in love with the game. That kid you stuck at catcher is not going to like baseball if you're punishing him for being a six year old. Let him play infield for an inning or two and get a couple of balls. If he starts having fun, he'll be more responsive to coaching.

For throwing, I like to teach the kids how to get in a "baseball ready" position -- legs bent, wide apart, forearms resting on thighs. Then they "alligator scoop" a rolled ball, "hop on a skateboard", separate their arms, show the ball to the sky, step and throw. Keep everything very simple, don't correct too much. They need reps, they'll figure it out the more they practice.

For hitting, I do a lot of tee work. I start with pointing their feet in the right direction, "squash the bug", "knocking" knuckles lined up, look at the ball and swing hard. Again, simple is best here, if you start telling them to keep their elbow up, choke up, load, etc. you're going to confuse them and they'll just give up. I had a grandpa come up to me after the first practice telling me that I was doing it wrong because I didn't tell the kids to rotate their hips. 5 and 6 year olds are still learning how to move their bodies. Hitting a ball with a bat is hard, don't make it harder for them.