Native plays are heartwarming and nice to watch the dc.
They are also a massive stressfest and I can see both sides.
It's nice that children can watch their older in a play, but these places get hot and stuffy with the amount of people there, it often starts late and it's not Suprising that a preschooler and babies get restless at suddenly finding themselves in a packed room full of strangers, so many voices chatting, heat etc.
Then it makes it harder for the dc to perform as on top of facing loads of parents (which is v different to rehearsals etc) and nerves, they get distracted by children who are playing up. I can imagine it feels intimidating stood on that stage for some dc.
Which then pisses off the parents of the dc on stage as they can't hear their dcs part, or have to watch as they stand there distracted on stage.
My nieces nativity was interrupted as SIL allowed her toddler to wander up to the teacher leading the nativity, try to climb on stage with the kids, and basically just letting her do whatever she wanted while she watched the play. The kids had to restart twice! She was mightily offended that people and teachers didn't think her dd"cute" I ended up taking her dd out myself as she screamed the place down when the teacher told her "no" and SIL was insisting that her dd couldn't leave because she'd miss the play. Was glad to get out of there because the daggers were getting thrown to me too.
It's behaviour like that of my Sils (who does the same at sports days, assemblies etc) that ends up creating these rules, it's sad that all children miss out as a result.
My dd got upset at not being heard in preschool because a toddler cried from about a quarter of the way through right to the end. She never forgot and when it came to reception to was making sure I could hear her, I was at the back of a packed church and her one line was the loudest (not shouting) clearest thing I heard the whole through including the teachers speeches. She remembered the noise from pre school and adjusted her voice. She's usually very nervous and I got nears in my eyes at her confidence.:)
OP I would have read the letter to mean no under 5s. Reason behind it was shit, but "because of limited seating no under fives can attend" means all under fives can't go regardless. Like if I read "due to mud being trampled in carpets, no wellies allowed indoors" I wouldn't think it didn't apply to me cos I didn't have mud on my wellies. It means no body can wear wellies indoors. But you've had a tough ride here and I see that you're upset today, try to think of the positive, that dd got a parent at each performance, she'd have been chuffed to bits. 
and I hope you have a lovely Christmas.