As a fellow parent, I cannot recommend Apple Arcade enough. My son is only allowed to play games that come from AA. These games aren't allowed to have any ads or in-app purchase. In return, you pay seven measly bucks a month (though I have it included as part of a package since we use iCloud and Apple Music and Apple TV+ anyway).

The games in AA are either made for Apple Arcade (some great indie type games) or, very commonly, they are basically 'de-fanged' ones from the regular App Store, with all the IAPs and ads ripped out. Where there is an in-game currency that normally is scarce without paying, they'll either just give you a bunch of it to start with, or you will earn it naturally while playing.

I agree with you that the number of ads and purchase-pushing mechanics in all regular App Store/Play Store games is insane. It's all because a few whales who do buy these purchases are what pays for the whole thing.