I have hosted too many birthday parties to count. I make sure _parents_ have the invitations 10 days prior to the party. This way, they get enough notice to purchase a gift either close enough to the last payday or far enough away to plan to purchase out of the upcoming check. Times are tough. You need to give enough notice.
Be sure the parents get the invitations. Don't trust children under 8 to give the invitations to parents. :) If you do give them to the children, be sure to do a follow-up call to the parents to ask if they got the invite. If you don't have their contact info., you can give reminders to the teacher to put in the cubbies. (or have the teachers make sure the parents get the invites, but not all teachers like that responsibility, I've learned)
Put RSVP and a date to have it done by along with your e-mail, phone #, etc... This does not mean you will get any at all. Parents don't seem to understand that courtesy. (hmmmph) I usually get responses from about 2/3 of the kids that actually show up. So, plan on having more and/or less than invited.
As for time, I would do one for little people like you are at about 1 pm. This way, they can have plenty of time to wake, eat, get ready, take a nap if need be and then go. It's a good time so if parents want to feed them something else for lunch at home or take them and eat there, it rides that time line nicely.
Be prepared for Chuck E. Cheese. Don't know if you have had parties there, or gone to any and witnessed any there, but be prepared. It can be crazy loud, busy, filled with crying children, grouchy grownups, etc... so keep your "cool hat" on and remember to breathe and have fun!! :D
Oh, and on a side note, be prepared for the parents who say, "Oh, and Johnny's little sister begged and cried to come, so I thought that would be fine....! Thanks!" and there you have an extra child. Take extra goody bags (if you are doing them at all) for those surprise guests. Pretty much every party has one or two surprise guests. :)