thactoadThe children in the garden are playing football. - Is this an adjective phrase telling us more about the children?
Yes. It tells
which children are being considered -- not the children in the kitchen, for example.
thactoadThe children are playing football in the garden. - Is this an adverb phrase of place telling where the children are playing?
Yes. It says where the playing is taking place. It's not taking place on the street, for example.
thactoads the phrase in both sentences also prepositional phrases?
Yes. The term prepositional phrase classifies the phrase as a pattern of certain parts of speech. The terms adjectival and adverbial classify the phrase by its function in the sentence. So you can have an adjectival prepositional phrase and an adverbial prepositional phrase.
CJ