This here is my 16" bike which I'm going to at least try restore. I've put some wider bars on it, fixed loose things etc. My friend removed the pedal back but I don't think he has put it back together properly because if you pedal backwards it goes backwards... Does anyone know how to fix this? Feel free to ask questions! Cheers
In order to restore it, take off/disassemble the major/large parts: Fork, wheels, and cranks. Go slow here so you can put it all back together later. Give it a good degrease, wash, wax then reassemble with new grease. You don't really have to remove and tear down the hand brakes. Grease the seat post.
Park tools has a good page on how those coaster brakes work: http://www.parktool.com/blog/repair-help/coaster-hub-overhaul-pedal-brake-hub
However, all you really need is this graphic to show you how it all fits together:
I just used the regular Polylube they sell when putting them back together since it was all I had.
Wheelbearings are really easy to find online as well.
Then replace any consumables (tires, brake pads). If this bike isn't doing any dirt, you can find 16 inch street tires as well. Even on bikes that small, they make a huge difference.
You can look at brake cables, and chain as well, but they are a replace as needed thing.