I can't remember the name of this show that I believe was at some lady's cottage on the water.. there were puppets that were made to look like two kids, there were these people dressed as records and would dance, the lady would do crafts, I believe she was a grandma?

I figured it out!! I've been trying to find this answer literally for years!! And I finally got it! I know for a fact this is the show you are looking for!! Ready here it is! SIZE SMALL! Google it, I promise its what your talking about! The cottage that open its eyes, the granny that whisltes when she says the letter "s" and even the dancing records!. your welcome!