I have a small house with no playroom, so all the toys have always lived where we live. I have my large living room divided by a couch and had abandoned the behind-the-couch area to the kids. But it doesn't really work. Kids like to play where you are. So every now and then I get a great big urge to pitch things.
When my kids were the age of your youngest, I pitched without asking them. I found I always had a better idea of what was a good or well-loved toy than they did. (I still pitch broken things without asking them, but I have to be sneaky about it).
Once they were about 4, I let them help me decide. My friend made piles of toys she wanted to give away, then let each child rescue two. I usually just suggest that a toy is too young for them, and this usually works. I also use the line about needing room if they expect to get any birthday presents, and this works. My kids are the same age, however, so I suspect part of your problem is keeping things around for the young ones. I hope you have an attic. One trick is to get the toy packed up and in your car and ready to go somewhere as soon as they agree to part with it. If I dawdle my boys will rediscover the toy and rebond with it and it will stay in my house!
When I am not sure if my kids still want something, I have moved a toy to the basement. The kids could still find it, but if they don't find it and don't play with it, I feel comfortable giving it away.
I have plastic bins in my living room--one for legos, one for cars, one for playmobil sets, one for rescue heros and one for action figures. Everything else goes in a miscellaneous bin. I can sometimes get the kids to help me clean up more effectively if I just ask them to put the action figures back in the action figures box. (Although usually my house is a wreck).
My old nursery school teacher reminded me that this clutter is not going to last forever, and already they are getting less things out every day. Its those early years that are hard.
Other people do a lot better job of getting their kids to clean up than I do. I wonder if you absolutely require a complete clean up if this makes kids wantmore careful about how many toys they get out. Any tips anyone???
My major problem is finding someplace to take old toys. The consignment stores around here do not want them, and our local goodwill does not accept toys. My best charity has been the kids old nursery school. They will take anything gratefully.