First and foremost, I check my behavior. If I'm pissed of or stressed out from work/home issues. My daughter feels it and reacts to it.
Next, I'd check diets. It's not unusual to have lactose allergies, sensitivities to food dyes, etc. that cause behavioral issues. Also, if they are eating a lot of processed convenience foods and not whole foods, I'd make the switch. Chuck it all, change your eating habits and see if that makes a difference. There will be protesting at first, but don't give in.
Third, I'd read the book Siblings Without Rivalry. And make sure they are each getting their own "me" times with mom.
Fourth, make sure you are all getting enough sleep.
Fifth, rule of thumb with time outs from my pediatrician: one minute for each year. Your girls are young, and their behavior seems age appropriate to me. They aren't cognitively developed enough to understand how their behavior effects others or to effectively understand their punishments.
You might want to check out some Montessori resource sites for some ideas of activities for them. It can be as easy as sorting beans to planting to some beans, anything that will engage their minds and bodies. Set up little activity areas for various things. Books in one corner, building blocks in another, that sort of thing. Make sure to keep it child-led and take your cues from them as to what they need learning wise.
This will pass. 2 and 3 are TOUGH years. They have a lot of learning going on and I think if you can harness that energy/thirst for knowledge and find ways to keep them engaged it'll make a world of difference.