I have a Christmas party every year for my daughter's friends (they are between 3-7 this year) and we do lots of fun stuff!
You could do gingerbread houses for each kid. That would be really fun and would keep them occupied for a while...plus it's age appropriate for all levels b/c each kid can spend as much or as little time as they want to/are able to on their own house.
I did order some crafts from Oriental Trading Co that are really cute! We are doing picture frames (which would be good parent gifts) and gingerbread placemats.
I also make a few non packaged crafts. This year we're doing candy cane reindeer which are really cute and easy! Plus we are doing Q-Tip snowflakes. You put a blob of glue on a circle of wax paper and alternate between full size q-tips and ones that you have cut in half so it looks like a snow flake. Top with another circle of wax paper and you can even put a small picture of each child.
I've also made a stamp out of round furniture pads. I bought three different sizes of pads and made a snowman shape out of them. I glued it to a piece of cardboard and then the kids dip it in paint and then onto a paper. They turn out really cute!!! You get multiple pads per box so I made a few stamps so more than one kid could do it a time. I took left over pads and cut them up to make a stocking cap stamp and a top hat stamp. I cut small rectangles of felt for the scarves and a pencil eraser dipped in black paint (or a fingertip) for the coal eyes, smile and buttons. They can draw on arms with a brown crayon or colored pencil. You can also make these into cards very easily.
For my Sunday School class I just ordered a Christmas Tree earring kit for my kids to make for their moms and they are really cute! It isn't hard, but smaller kids will need help. Maybe the older kids could help them. The only real tool you'd need is a pair of plyers to crimp the ends when you are done.
A cute food craft idea is to take flour tortillas and fold them and cut them just like a paper snowflake (again older kids can help younger ones and warm them first for easier folding) then put them on a cookie sheet, brush with canola or veg oil, bake for 5-6 minutes then dust with powdered sugar and eat!