What is the best way to seperate 2-5 yr. old play areas from 5-12 yr. old play areas without signs that they can't read?
What is the liability of having a 2 year old playing on the 5 year old equipment?
There are no real liability issues as long as you have signs that state the age range for the specific area.
The best way to seperate play areas is by doing just that. Have a clear border between the two play structures. It will require a few more border timbers, but that would probably be the best way. You could also talk to your playground designer and request that they do their best to have a clear seperation between the two structures.