J.G.
My niece recently had her 2nd birthday and she is the youngest in the family. We had children from 18 months to 12 years and the party was a hit. This is what my sister did:
She had aprons for all of the children and water base paint. She had a house built out of cardboard in the middle of the living room. All of the children painted the house. She also had wood letters (one for the first letter in each child's name). When the kids were tired of the house or acted like they needed some space (if you know what I mean) they were redirected to their letter to paint.
It was fun to watch and all the adults even joined.