I have now done several parties for my 2 DDs (aged 3 & 5). The first one was a nightmare - I was clueless, they had played all the games in about 15 minutes, then they had tea, said they were bored so I packed them all off into the (wet and muddy) garden for the last hour (!).
What I learned from bitter experience:
2 hours absolute max. We did 1 1/2 hours for DD2's 3rd b'day and it was plenty.
Max number of guests = the number your table/food area on floor will comfortably seat. No more than 12.
Pass the parcel twice - once early on, second one after tea to calm them down (and make chances of being sick less!).
Other games: musical bumps, musical statues. Keep the music going for longish periods as well as short bursts. Best done before tea to tire them out. Small prizes (eg small lollipop) for highest jumper, best dancer, best hopper etc (put straight into party bag or tell them that is what you are doing, otherwise they will want to eat them straightaway). Pin the tail on the donkey also popular, as is hunt the thimble (hunt the lollipop went down even better!). We finished up with sleeping lions and a couple of the children fell asleep.
Take them all to the loo before they have tea. When one goes they will all want to, so it will help if someone can be toilet monitor (an adult, not one of the children!)
Keep the food simple. Don't waste time on sandwiches. Crisps, sausages, cherry tomatoes, pretzels were all popular. Fairy cakes (the brighter the icing the better - the birthday child often enjoys helping to decorate too!), iced gems, chocolate fingers, cornflake cakes and birthday cake quite sufficient. Oh, and don't put the sweet things on the table with the savouries. Wait until they have had a good go at the savouries before bringing on the fairy cakes. Disposable everything, including tablecloth, and handy binbag essential! Lidded cups with straws for younger ones are a good idea.
Be very, very firm with the children. One boy at a recent party ate two crisps then announced he was going to go into the garden and play football. Two others stood up with him. I said, "No you are not, you are going to sit down and eat your tea with everyone else." And he did!
Personally, I found a large G & T helped me get through it (and I am not a spirits drinker!). Although the other mothers who stayed looked horrified and only drank tea! Oh, and at DD2's 3rd b'day party, the mums were a nightmare. They did nothing to help, but sat on the sofa drinking tea, which my DH ferried back and forth. If you are going to be faced with nightmare mothers (and if you don't know them, you won't know until they arrive!), get a very good friend to give you some help/support. DH and I felt like the servants at this party.
Don't open presents as they arrive. This can be an after tea activity too (and kills another ten minutes). This will also enable you to write down who has given what for thank you letters later.
Mess was minimal - few crumbs under the table and one spilt apple juice. Table debris goes into binbag straight after tea and then you can have your house back again.
Softplay areas also fun, but one local to us does crap food and kids are all in together with other kids using it, so fairly impersonal. The other (nicer one, private, more structured with people organising games etc) costs 250 euros for 1 1/2 hours for 15 children max AND you have to provide all the food, table ware etc. Home was cheaper...