For our son's birthdays I either build or carve a watermelon sculpture and decorate it with other fruits he can have.
His first such "cake" was tiers of watermelon circles (progressively smaller from bottom to top), with between-layers of sliced bananas, decorated around the base with unpeeled whole bananas, and decorated on the top & ledges with strawberries and blueberries. We added his two candles with banana-slice holders and topped it with an adorable Curious George figure amongst a nest of blueberries & banana slices. It was magnificent, colorful, fun -- and he still remembers it to this day!
Another favorite watermelon "cake" was a carving inspired by his love for watching his big cousin play video games and the "watermelon carvings" Google Images search I did the day before
It said, "Happy B-day III" in Guitar Hero lettering and really turned out wonderfully.
If you'd like to try your hand at watermelon carving, there are also plenty of great ideas on the watermelon promotion board (again, Google is my friend...)
HTH & happy b-day to your little one!!