Been there - facing it again.
1) Have the party at 3 pm. Then you don't have to worry about food. Have a bowl of chips or some snack, make your own cake and buy the generic big tubs of ice cream.
2) For my dd's 2nd b-day, we had a potluck. We asked each person to bring a specific dish - baked beans, macaroni salad, potato salad, etc. We supplied hamburgs and hotdogs (which you can get pretty cheap at the warehouse clubs), bread from the discount grocery and our own condiments. I always make our own cake and decorate it to match the theme. I also make a big sign for the child on poster board.
For my dd's 3rd b-day, we had a cowboy theme (Toy Story) and everyone dressed like cowboys, we had a bonfire and roasted marshmallows. Everyone had fun!
If I think of any more, I'll let you know.