The whole sentence is:
What is the role of そうに in this sentence?
楽しい is an い-adjective meaning "fun". In Japanese, there's nothing wrong with saying "I'm having fun." But generally you're not going to presume to know the psychological state of someone else.
楽しそう is formed by dropping い and adding そう, forming a な-type adjective meaning, "appearing to be having fun".
So the sentence
could be translated as "The children were having fun playing and making small snowmen." Though with such a short snippet of a sentence, the feeling I get is that you could just render it simply as "The kids were having fun making snowmen."