Babies as young as 3 months can begin tracking the light. Just move slowly and keep their attention by frequently coming close to your baby with the light. She/he may even try to reach out and grab it.
Older kids will love playing flashlight tag. You will need a flashlight for each participant. Then decide who's it. Once in a dark room have the players turn on their flashlight. Now whoever is it needs to try and cross their flashlight path with another player. Once they cross that person is it.
To mix things up I sometimes have kids practice their prewriting shapes or letters by "forming" them with their flashlight. (This really works on formation and visual memory because they can't see where they've went!)
*PS...I could not resist this glow-in-the-dark baby picture.