At my kids' 1st birthdays, they were the center of attention. The 'party' was more for the adults than any kids, as 1 is not a kid party. The rule of thumb for a children's birthday parties is that the guest list is equal to the number of years... so if your child is one, then one child is invited. The attention span of a baby is limited. At this party your son is going to be destroying his first cake, lots of pictures are going to be taken and he might be able to open his own presents, but that activity will probably be done by you. So....
keeping in mind that this is a party for you and not for him, that you and he survived that all important first year:
Cake: A small cake with 'Happy Birthday (your son's name)!' on it is appropriate. You can put the one candle on it for him to blow out and then he gets to tackle his cake. Cupcakes for the rest of your guests are perfect. You can make just enough without having leftover cake.
Meal: Pizza is great, again what do your adult guests like? Pizza is fine, green salad, a punch or soft drinks, coffee, etc. You mention kids, pizza is fine.
Entertainment: Your son will be the entertainment. He will be performing and having a great time. People come to see him and watch him react to his cake, his gifts. This isn't about having a clown, a magician, a themed party. Again, you mention having other children there. A 10 yr old is not going to interact with a 1 yr old, not when they're 11 and 2, 12 and 3, 13 and 4, and so on. Probably not until they're 35 and 25 will they interact and do things together. If you have children coming, depending on the age range plugging in a movie for them to watch while the adults are talking and watching the baby do his thing is appropriate.
Party bags: For a first birthday, not necessary at all. Why would you? These are more appropriate when your son has his friends over when he's around 4-5 for a party. And then the bags can be simple with some stickers, fruit snacks, crayons, a ball, a whistle, etc. You can coordinate your theme with the contents of your bag. But for a 1 yr party, totally not needed. Kids don't need to have a gift for showing up.
Grandparents, aunt and uncles, and very, very close friends would be on my guest list. Take lots of pictures. When you send your thank you notes for the gifts, enclose a picture of your son with that person, or a picture of him wearing his cake, as he will probably do a great job of getting it all over himself. Priceless 1st birthday pics!!
This is about your son. Keep the focus on him and make the meal and the day simple. Having this around a meal time, like lunch works best on a weekend. Adults don't leave like kids do at a party. They linger, especially family. But the key here is your son will go down for a nap in the afternoon and that's a great conclusion to the festivities. A couple of hours max. Again, you live in an apartment, you are limited in space and you shouldn't invite more than your home can hold comfortably. People are aware of today's economy and wouldn't want you to spend your son's college savings for his party. Again, as much as this is your son's party.... he isn't going to remember any of it. This is all about you, the parents and surviving sleep depravation and all the other challenges to get to this day. Congratulations!!!