Hi Elaine! I only have two kids, and they are quite close in age, so I don't have to worry much about taking one to school while another sleeps. That's got to be tough on everyone. As far as I remember, my copy of the book does not address any modification of the method when other children are in the house.
As much as I hated it, the baby would sometimes wake up his sister. Fortunately, most of the "major" cry-it-out happened at bedtime, before my daughter went to bed. However, we have always used white noise in her room, and we turned-up the volume (quite loud) during the major adjustment periods. But, yes, her sleep was somewhat disturbed for a relatively short period of time. Likewise, we used loud white noise in the baby's room, so that his sister's bedtime routine didn't disturb him as much. But even today, he will wake up when she makes too much noise!
Regarding activities for the older kids when the baby is napping, we were stuck in the house (or in the backyard with the baby monitor). We didn't leave. Of course, I had the luxury of both taking an afternoon nap at the same time, so I didn't have to worry about noise in the afternoon. Since your kids are a bit older, maybe that would be the time to bring out the art projects (paint, play-dough, crayons, etc.) Or a GREAT time to try some simple baking/cooking with the older kids.
Best of luck!!