L.D.
First - you did clear this with the school, correct? I've never heard of anyone full blown celebrating a birthday at school.
If its ok with them -
mini cupcakes - just the right size and easy to server.
Bounce House - they have special rates during the week.
Target dollar spot or dollar store for favors. I did little trucks and boats from the Dollar Spot at Target for my son's b-day this weekend and his friends seemed very excited.