Hi OP,
We recently did a party for my 4yo, so may have some useful experience. We've also been to a few now.
Things to consider:
Who do you want to invite - Children your DD knows independently? Family? Nursery friends? Siblings? Make a list and prioritise.
That will help you think about budget and location.
Venue - Parties we have attended have been:
Local petting farm (includes tour, party tea)
At home - 3-4 relaxed party games like pass the parcel and musical statues plus tea
Village hall - we hired a children's entertainer, or just inflatables (loads of companies hiring packages for about £100-150 our way) plus party tea
Soft play - some have been exclusive hire, some not (but with a table reserved for food)
Pizza making
Leisure centre with games or trampolines
The advantage of places like soft play is they take care of all the catering and cleaning up, but you obviously cost a bit more. Community hall hire etc is usually a cheaper option.
We had nearly everyone attend our party, I think in part because it's a great way to entertain a preschooler for a couple of hours. We sent our invites about 5 - 6 weeks in advance and gave a date to RSVP by.
All the parties we've been to have been two hours long.
Party food - sandwiches, crudités, crops, fruit kebabs, biscuits, pizzas, squash and water in jugs.
Generally adults attend too.
I would say don't worry about trying to cram too much into the time. And they don't seem to eat much food as they're too excited!
Those are my immediate thoughts. Hope that's helpful.