honestly i think halls/entertainers etc are overkill at that age!
Include a party lunch (of a child's variety, crisps, little pizza, little sausages, little sarnies, cakes, biscuits, grapes, tomatoes and cucumber with squash/squash with tonic water for those that find fizzy exciting)
Personally i hate the minefield of pass the parcel but i think it has to be done, i'd go for one wrap layer per child with a small sweet in each layer then shut your eyes so whoever gets the main present is just luck. musical statues/bumps/cushions is a real winner. a game of sardines should work at that age. pinata's go down quite well but you need the space to do them. i definitely second the dancing competition too, that's been a real winner before. and a few balloons to knock about.
Like a previous poster said have prizes for each game that can be popped in their party bags (I love doing party bags!!) get a bag of 'treat size' sweets and use those. Just make sure everyone wins some, give them out for all kinds of silly things as they enjoy that.
Finish with a game of sleeping tigers and like a previous poster said, have the wine ready! 