Would applications of fiberglass work? I kinda assume by making a car body, you're probably looking for some rigidity...
This is just a suggestion but how about using a marine spar varnish?You might be able to use a latex based paint but I'm not sure there would be enough flexibility in it to prevent cracking.I would also only coat it on one side(the outside) to allow the material to breathe.
Thompson's Water Seal works great on tents. It still acts like cloth, but is waterproof. If you use something that hardens, eventually the cloth will break.
Depends on how you finish it, but rubber roof cement or tar... I saw some canvas boats in Ireland that were sealed with tar or the black rubber roof paint, but there was no finish on top of that. http://www.castlebar.ie/photos/pj/currach1/index.html
Most modern canvases are fairly tough and would take a coating of enamel jst fine. If the canvas is cotton duck like you'd make a tarp out of, you'll need to wash it first with strong detergent or TSP to remove the sizing, the stuff that makes it a little stiff. Sizing would hinder the adhesion of the paint. If the canvas is any type of synthetic, wipe it down with a grease and wax remover just like you would before you paint a metal surface. DO NOT USE LACQUER THINNER, it will affect the vinyls in the canvas. There is a fabric called Calabana that is used for awnings; vinyl type covering on one side, cotton duck on the other. It comes in all sorts of colors and can be painted with vinyl dye type paint. The best part is that after you fit it, you spray the backside down with water and it'll shrink to fit tighter than a pair of jeans on a Disco Diva in 1978. Problem is it's only 36" wide.
A buddy of ours makes art projects for "Burning Man" every year. Builds a cheap condiut frame, then covers it with bed sheets soaked in Elmers Glue and water. Then paints it with latex house paint. They last several years......OLDBEET
Tingler, Check you local sporting goods store for some spray on water repellent. Get a couple of cans, cause you'll need to reapply once and while. I've used it on camping tents and it stays dry and flexable. Not sure if you'd be able to paint the canvas first...
Keep in mind that whatever you do it should be fire retardent. Kids play with stuff they shouldn't sometimes . All the stuff you mentioned will go up very fast and be deadly if something should happen. Think Hindenburg! Just a thought
There are water proofers made for tents, suede, leather clothing, etc. Usually spray cans. I've used them and they work. Sprayed Wife's new Suede coat, thought it would ruin it but it worked and other than doing the job of keeping water from ruining it, you can't visibly tell it's been treated. Any "paint" ut on a flexible surface is going to have it's vehicle/polymers dry out and crack and leak.
Traditional tepees are canvas and usually coated with boiled linseed oil, several coats of it. You can also look at cabelas website they have something specialy made for canvas tents but i think that it is similar to boiled linseed oil. I have had good luck with the linseed oil and its cheap, you can get it at hardware stores up to 5 gallons.