What is the cheapest yet stylish way to transform the toy box?

I have used (successfully) fabric by wetting it with starch. So many choices in fabric for little boys or girls. Just hang it on as if it were wallpaper. Once dry, usually overnight, and you want to change it again, just peel it right off.

I would strip it, paint it red, and instead of a cushion on the top I would glue a chalk board to the top

scrape the decals off, sand and paint to match, then get a board and foam pad cut to fit the top and cover in a fabric that matches the theme or color pallet.

I converted my old flip-top tack box from 4-H days to a storage bench. I painted the outside to go with my decor, then removed most of the dividers inside and lined it with fabric. I cut a piece of 1/2" plywood to fit the hinged lid and inserted some T-nuts, marking their location on the lid and predrilling the holes. I upholstered it with foam and upholstery-weight fabric, then mounted it from the underside of the lid into the T-nuts with small carriage bolts. A few decorative brass tacks and a lovely old antique hasp lock and it was done.

IF you are building a toy box with a lid, be sure to get the safety hinge so that the lid won't slam shut on little fingers

Strip, sand, paint or stain. Draw or trace over picture with carbon paper under it & paint picture of his choice or his name. Put padding on top so he can set on it in same design or His favorite color. Good luck.

looks like you need a bigger toy box !