Our very first family party like one of these happened when we moved into our current house. I had been living with the kids for about 4 months at my mom's house in South Texas while husband was still up here working. We thought that with 3 under the age of 4 it would allow us to sell our house faster. Shortcake's 2nd birthday happened during that time so when she turned three, we wanted to make it a very special day to make up for the insanity of the year before. Nemo was big then so we started out with streamers and characters printed off the internet. Husband put the streamers on the ceiling as if the dining room was under water and I made seaweed shapes out of green construction paper. From there, it has progressed to spider webs on the wall made out of black yarn and conestoga wagons in the playroom.
Anyway, I don't want anyone to feel like they can't do this too. Use what you have even if it is something they have seen everyday. Don't be afraid to make up your own games or activities. I understand that maybe cakes are not everyone's forte, (I've told you before that I can't make cookies to save my life!) but you can still try it! I'll bet that whatever you do will wow them! And really, that's what it's all about.