M.F.
The more low key the better with 1-yr-olds. Honestly, by the time you pack up to go somewhere else, you'll have worn out the guest of honor. We timed our kids' first birthdays to be at the house when they woke up from their afternoon naps. So, if nap was from 1 -3, our friends and family started arriving at 3-ish.
Also, I did cupcakes for my daughter's first and I will never, EVER do that again. Took forever to icing all those things and put me in a bad mood before the day got started. A friend of mine had a great idea to make a small cake for the birthday boy, then buy a larger one for guests. Super Target has great cakes! However, I will say the cupcakes were darn cute. Still, I learned my lesson and bought a cake for our son's first!
As far as feeding everyone, we grilled for one, then ordered pizza for the other. I definitely enjoyed the pizza party more than when I was having to play hostess and set up a serving line, refill forks, find napkins, etc.
For party favors at my daughter's party, we gave the kids each a sand bucket and shovel with plastic sunglasses. I think we only needed about 5 of them, and I got everything at the dollar store. I might have spent $1.50 per favor.
At my son's we got a bunch of rubber duckies and tied a ribbon around each one. The duckies were $1 each at Wal-mart. You could probably find packages of little bean-bag sports balls at dollar general or wal-mart for an easy parting gift.
As far as planning this far in advance, it IS wise to go ahead and set a budget for the party. We've done 6 birthday parties between the 2 kids (ages 4 and 2) and it's very, VERY easy to spend $200 on even the simplest party. I spent $40 on adorable paper plates and napkins alone at one party. Throw in a $30-40 cake, drinks, $60 in pizza, $15 in party favors, balloons and decorations...
Since we can't seem to get away from the $200 mark, we've adjusted the budget to accommodate it so we aren't left wondering why the birthday made us broke. These are parties with 15-25 people (we have a large extended family, all local!), so if you have fewer guests, you might get away with a little less.
Good luck!
Happy planning!