From my point of view, both of these little boys are in trouble. It is not usual or normal for a 5-year-old to pick on a 2-year-old. It is not helpful to the 2-year-old’s growth and development to be so dominated by a bully. By all means, set clear limits and consequences with the 5-year-old and comfort the 2-year-old. But even more important, get these kids to a counselor to find out what is going on with the older boy — and to give you some guidance and support as you work to turn things around.
Both boys need you — though in different ways. Both boys count on you and the other adults in their lives to provide safety and help when they can’t help themselves.
I wish you well.