Little one was invited to a Mike the Knight party recently (for 4 year old so had 2-6 year olds) and I have to say it was fabulous. It was held in a small village/church hall type place and the activities they had were: jousting (basically the cardboard tubes from rolls of wrapping paper with a bit of silver foil at one end, or spray painted silver (can't remember) and slotted through a paper plate for the handle and then someone held small hoops/rings (7 - 10" in size) and the "knights" had to run up and try and get the sword through the hoop. They loved it. Simple, not highly technical or competitive or skillful but novel! They let two go at once as a sort of race, and the rest cheered!
They also made Mike-the-Knight masks from foam and paper fasteners. They had egg and spoon races with the Early Learning Centre plastic egg and spoon race set, they then all had food then pass the parcel after as a calmer game. Treasure hunts always work well. The age group only just are understanding the rules for games and younger friends may struggle for the musical... games. But at my little one's party we did musical muddy puddles and had paper "muddy puddles" that they had to stomp in when the music stopped, just big enough for one person each, then after two practices, started taking one away. Simon says, works well, and you can always change Simon's name to fit with the theme. Pin the tail on (or wart on gruffalo, or knight on the horse saddle)
Personally we don't have finance for entertainers, parties don't need to be long (1.5 hours can be fine incl. food), and we are not into inviting everybody so my little one chooses 8 friends who she actually socialises with (play-dates etc) outside of nursery even if they go there too. Write a list of games and get someone to organise/bring out props etc, while one organises the children. Have others doing the food (relatives are good at this). However, our little one is not yet in school, which may be harder to select a few. Our local community centre is very reasonable hire price (£10 per hour or something ridiculous!) but limited in availability, so pays to check out church halls, community halls and little rooms off of soft play etc.
Definitely don't spend more than you need to as it is unnecessary expense. The last two bought entertainments my friends had, one cancelled due to genuine sickness [shocked] the night before, and managed to put them in touch with a bouncy castle hire, but the planned messy science didn't happen so the parents had to come up with a plan last minute, and then another party, some magicians were invited onto a steam train for entertainment and took some strong encouragement as they didn't want to do it when they arrived even though they had had a full briefing!! I have to say once they started they were brilliant, but great stress for Mum!
Whatever you decide, I am sure DC will love it.