That cage is way too small. Cockatiels are bigger than they look - that cage would leave them very little room to turn around or spread their wings. I recommend at least 24x22 inches (61x56 cm) for a single bird.
As far as toys go, balsa gets destroyed first, always. They would be plenty happy with chunks of balsa on a string.
Palm - they really like the zigzag woven palm and palm finger traps.
Cord/stringing materials - tri string paper cord, seagrass cord, safe leather... tied in knots, wrapped around branches, etc.
I buy most of my toys from the Canadian vendor Things for Wings as I'm Canadian. They have some really amazing toys. This is a haul I got back in May -
You can see they are mostly natural, crunchable materials. Tons of balsa, vine, palm, yucca, natural cord, raffia, all sorts of fun stuff
Bark - I give them natural branches salvaged from around mine and my neighbor's yard. They have maple, lilac, and basswood (linden) branches which they love to peel and shred the bark and leaves off.
The main branch is basswood. It's hung by two very large toggle bolts into the drywall and nickel plated chandelier chain. I attached it to the branch by bolts and hooks, and double secured it with stainless steel airline cable. The fresh branches laid around are lilac
They had a blast chewing them down!
They also have a boing and orbit from Oliver's Garden (another Canadian vendor) which they LOVE.