Agree on timings if doing food. Some organised games some free time. Space for a bouncy castle? Bring out food at a set time but have some nibbly bits out beforehand - I find if you just leave them to it some trough it all down and others forget to eat anything then turn a funny shade of grey and feel all poorly! Don't go mad on food though as the little blighters won't eat much savoury....
I often do some kind of craft activity - sounds virtuous but calms them down and kills time - maybe buy lots of paper crowns (Baker Ross or similar) and provide glue sticks and bits to decorate them with? OR rope another adult into face-painting - could do them all as clowns?
2-4 sounds fine. I would aim to eat at 3, but try not to let them spot the food cos they'll all get distracted and start to nag for it.
Wouldn't bother too much about games, if you leave lots of balloons around they'll just kick those about. Or maybe have a couple of simple games like musical statues in reserve in case you need to rein things in.
I think 2-4 would be ok as long as the children coming have all given up their afternoon nap. I did a morning party for my DD 11-1 which worked well as she was not tired and it fitted in with early lunch.
The clown sounds good but other than that I don't think you need to organise that much. I expect the children will be happy to play with the toys and run round the garden...maybe you could give them each a pot of bubbles to blow in the garden.
I expect the parents will stay with children that age so maybe you could do a few food items that the parents will enjoy...I did a plate of salmon sandwiches for the parents and some cheese and pineapple sticks which were enjoyed by all. I laid out the party table with napkins plastic cups etc. before the party and put a few balloons up, then brought the food out of the kitchen half way through the party..