I'm an early childhood spec ed teacher so here are some suggestions if you were a mom I was working with....
Explain in an age appropriate way. In other words, don't give too much information that could overwhelm them or confuse them.
Answer their questions as best as you can and if they are sad you can say something like "I know you are sad and that you love your daddy.". That is all they need, reassurance and acknowledgement.
Kids at that age just want to feel safe. Remind them that Mommy is ok and always going to be there for them and they will be just fine. OH and the the two year old knows more than you realize. So be aware of that if you are discussing dad in front of them. Two-year olds will 'act out' their emotional difficulties since they don't have all the verbal skills yet.
The 5 year old can and does understand a lot but again, keep it at a 5 year old level of understanding. The only potential problem with saying that daddy is 'ill' is that it may instill more fear than less. They will wonder if mommy too will get ill? will they get ill? IF you do want to go the 'illness' route then reassure them that mommy is well and not going to get sick and that they too are well.
Hope this helps!