This isn't my favorite of Barney Saltzberg's books, but it is pretty cute. There is a cute rhyme, a cat and dog, and every day the main character and her grandpa have tea together--with a twist. They are having tea in separate places, but connected to each other online (whether it's Facetime, Google Hangout, Skype, or whatever). I think that's really sweet and modern. If I ever have kids that's totally how they would get to know my parents, who live in another country but are very tech savvy :) Not only is it so much cheaper than calling, you get to see them instead of just hear them on the telephone.

Definitely tea and cupcakes for a literacy cafe, and I don't think a craft is necessary, but for an activity you could Facetime with another class, someone's friendly grandpa, or maybe even the author/illustrator if he does that kind of thing.