OP i get that you are not in a position to hire a hall / big day out sort of birthday & noone expects that every year.
However, you seem to be spending a bit on craft activities for just 2 guests.
At that age, we had a mix of types of parties & a lot were at home. Dd would have had 10 or 12 classmates / friends to the house & we did 1 activity such as 'decorating cupcakes' - i baked a couple of batches of fairy cakes in the morning & bought icing & decorating supplies & set them up around the kitchen table.
Once they'd completed that, they had a 'disco' & generally just played / ran around. Dd has a winter birthday so usually the garden was no go due to weather.
Other things we did were make your own pizza (bought bases & let them add toppings) & they then ate what they made
Once the activity was done. I'd sort out the party food - which was mostly pizza or cocktail sausages etc with popcorn & treats & always a cake with candles so they could all sing happy birthday. Sometimes I'd bake the cake sometime it was a supermarket job
We usually decorated the kitchen with balloons & sometimes homemade paper bunting which dd loved helping with in the run up to the day. Cheap paper plated / napkins in a theme, unicorns etc & def a party bag if only to put the cupcakes into.
2 hours later they'd all go home & 'party' over for another year
I think you can do it v cheaply if you prepare the food yourself etc
I think 6 or 7 friends gathered would def make it feel like a party for her