What shud one do.
My kids are too good in singing and dancing.
They are only kids and you should let them dance and sing ....but don't encourage them like everytime when guests are around some parents ask their children " beta chalo uncle aur auntie ko wo gaana sunaao" or " chalo dance ker kay dikhao".
Also, keep in check what they hear or see, if they hear bollywood songs all the time they will be singing those crapy songs, if they hear traditional rhymes they will sing that, if they hear Qur'an they will recite that.
Traditional rhymes are good for vocabulary and rhyming and also for imagination and for Qur'an I don't need to mention the benefits as you're a muslim and you probably know better than I do.