For pixelated designs, you should try beads. These beads are a wonderful activity for kids in arts and crafts. Your design is assembled on a perforated board, and then, using an iron and parchment paper, the beads are fused together to form a monolithic design.
You should definitely try creating your own Perler beadwork. These beads are cheap and also easy to find in craft stores and Amazon. These beads are created of food grade plastic. You don't need to glue or sew on the beads in place. Place the beads on a perforated board. Then iron the finished design with an iron to connect the beads.
If you're a beginner, use Perler's pre-built patterns to create thousands of projects.