3 is tough, but not impossible. When your 5 year old can ride, it'll will still take about twice as long to do trips as it would if they were on your bike/trail-a-bike/trailer with you. My 6 year old barely road on her own this summer because of the extra time it took to get places - we loaded her up with us.
A bike seat added to your existing bike/trailer setup is probably the cheapest option, our DD aged out of the bike seat at 5 though, and she would've been very cramped in the trailer with either of her brothers.
We opted early on for a longtail cargo bike that DH can bike with all three kids in the back (the youngest in a bike seat), and we also have a bakfiet (long-john front box bike). We can go pretty far on these, but hills are a challenge for me - the eldest 2 often have to get out and walk up the hill. An e-assist would've been wonderful if we were thinking ahead at the time we purchased our longtail. We will definitely keep our longtail long after the kids out grow it, it is a fabulous ride and it is a grocery getter and errand runner; however, the box bike will probably be passed onto another family with young children. It's range isn't as far, and it doesn't navigate some of the tighter spots in our neighbourhood well.