Having a 1-2 metre space between is perfectly safe, i dont recommend holding hands but your princess/party host will have sanatised hands or be wearing clean gloves. Another safe photo option is when your Princess stands behind the children.
The Princess will not lean or bend down to face to face level, pick up any children or cuddle without parental authorisation. There are safe ways for the child to share a hug with the Princess if they really want to. Your Princess will always be wearing a clean costume, and all equipment will be sanatised. Social distancing is advised at all times but in a child friendly and discrete way as to not make anyone feel worried.
I believe children are quite adaptable and so far every child understands. We always have a wonderful time, and this new way of life does seem possible to adapt to.