Ok, so without knowing the context it's a bit difficult to get things "right" so, bear with me ;)

suggestions

corrections

praise

Observation summary

• Identifying possible topics based upon observations, multiple topics/predictions may be identified.
Based upon 20 minutes of observation, I can think of the possible topics are to be hunting games, a baby (If the topic is a particular baby then it's ok to use 'a baby', if not, then I would use 'babies'), a bed time bedtime (I don't think you need the article 'a' there unless you talk about something like "a bedtime story", but if you are talking about bedtime in general, you definitely don't need it), seasonal songs. 

To me this would be a bit more natural: Based upon 20 minutes of observation, the possible topics I can think of are: hunting games, babies, bedtime and seasonal songs.

• Number of children involved
There were three children involved with the girl who (I guess it's not incorrect to use 'who' in this situation but leaving it out sounds more natural to me) I was tracking at during (This is only another suggestion. Using 'at' to me, makes it seem as if the observation was some kind of event you attended, so it's not wrong, it just sounds a bit weird to me)the observation.

• Conversations amongst the children
She showed a (No need to use this article here unless you said something like: a sympathy feeling) sympathy when she was talking with her peers about the others who was were (Because you said 'peers', plural) absent at from the art area. She said to the other child who was in the art area that her friend was absent because of sickness and so, she was making a card for her.

My suggestion: She showed a great amount of sympathy when she was talking about her peers who were absent from the art area. She said to the other child in the art area that her friend was absent because she was sick and so, she was making a card for her.

• How teachers were supporting the play
The teachers set the environment up before the children came to the center. (Awesome!)

• How the environment facilitated the play
There were Christmas themed or and winter themed activities on the tables such as shiny blue snow dough, shaving cream and baking powder in the sensory table, and making a Christmas cards (If you use 'a' then you can't use plural) table. The children naturally would learn about Christmas and winter. (This last sentence is interesting. If you say: The children naturally would learn... to me it feels like you are saying: The children obviously would learn... However, if you switch 'naturally' and 'would' like this: The children would naturally learn... to me it sounds like you are saying it would be easy for them to learn.)

I hope I didn't confuse you too much! Please feel free to ask me if you have any doubts or need any help.