If the top part of a child's dress doesn't fit, but the skirt part does, you can cut off the blouse portion, sew up the back part of the skirt, hem the waist area, insert elastic and make it into a skirt.
Great idea! Another similar to this is to add a ruffle or fringe on a dress that is too short, but fits fine otherwise!
Another good one is taking "too short" teeshirts and adding a skirt (or one from the dress!)