I wouldn't be so sure that the parents won't come, having said that our house is small and we had 3 guests plus 4 parents and 5 siblings - plus our 3, and it was fine. If it seems too cramped then you could suggests the lads go for a drink and come back at the end for the food.
I think 5 children in a hall would seem too quiet. You can have lots of fun in a small space, if the weather is nice you can put on coats and expand into the garden for a treasure hunt.
Also for party food I have discovered 'fairy sized food' so cut a sandwich into 8 small triangles instead of 4, get mini jammie dodgers, choc fingers, etc. They tend not to eat too much, but will, e.g. grab 3 biscuits regardless of size, so if you just give them small bitesized ones then there is less wasted.
Parents are not likely to stay. We had dd1's 4th birthday just before christmas and had over 2 girls from nursery plus ds had 2 friends as well. The girls were dressed as princesses and had a tea party with dd's plastic teaset and some party food. We did a craft activity (some beads and ribbon into a necklace) instead of a party bag and did some dancing to disney songs. They had a great time. You will be fine in your house, just make the party structured so that the space doesn't become an issue. We did tea party then craft then dancing to finish off and it was fine
My Dd is also 4 in a few weeks and we are having a party at home with 4 girls the same age. We're planning pass the parcel, musical statues, hide and seek, Dd thinks it will be brilliant! Keep it simple is my advice, oh, and they are having a traditional tea, of cocktail sausages, crisps, egg sandwiches, sweets galore!
Really not sure if hosting a princess party in smallish house is a good idea. My daughter will be four and only names 4 friends (all girls) when asked who she'd like to invite. Obviously we would host their parents too (3 sets we are close friends and one set from her nursery). My husband thinks maybe hire the small hall at our local community centre but I'm in two minds. Would it seem a bit odd to hire hall with such small numbers? I guess then if she changes her mind and decides she'd like to invite a few more it would be fine. Any opinions/experience greatly appreciated.