I have a 4 year old, and we've always had his parties at our house. We usually have 15-20 kids there, and I've only planned one activity -and it was just there for whenever they felt like it. They just enjoy running around, playing and having fun! Children don't get enough of an opportunity to do that these days. For some reason we feel like we need to plan and structure their every moment. The only structure I plan is singing "Happy Birthday," blowing out the candles and opening presents. We had a pirate party one year, and I got foam swords from Oriental Trading that they could decorate themselves. Several kids did it, but most just played.
I think the cupcake decorating will be a HUGE hit, but I wouldn't also do a candy bar. If you want to do a jump house -that's cool -but you don't have to. Don't be surprised if only one or two sit down to play with Play Doh while the rest chase each other all over the house!
We have a variety of snacks -and depending on the time, we have grilled burgers and dogs before or gotten pizzas. We've always had a lot of fun and every year several little ones tell me it's the best party they've ever been to!