Hey!
I'm sorry that you had a sad experience! Particularly when you are working hard and really want it to be great, you feel like a total failure when it goes off the rails and you really shouldn't.
My kids LOVE project parties. We have a big Christmas cookie making experience every year when the kids can have a friend or two over (so we end up with 5-6 kids all together). Projects were all that my five year old wanted for her birthday last year. We did three separate projects - but we did them at the house. I would recommend doing them at your house or some place where you have a little more control and it doesn't matter if the kids need to blow off steam? What we did was we talked through a few different options and chose to do cookie decorating (I pre-made and cut out the cookies, so they just needed to decorate), sand art (on the porch), and a sticker scene project. We also played a bean bag toss game outside so that the kids could win prizes. My daughter also loves to watch movies, so we made a mini-oceana (like an ocean-themed cave) where they got to eat pizza and watermelon and watched the movie. Many of the kids then when back and did more cookie decorating (I go all out, cover the floor and the table, and just put out a silly number of decorating options, frostings, candies, etc. for them to use). The kids all took their creations home in a bag. Your daughter will probably want some older projects (check out the votive candle "stained glass" project via google - super easy, votives are buy-able at dollar stores, and if you put in a LED light they make little nightlights for kids, she's a great age for that one).
We did end up with a sibling or two that I wanted to list on ebay by the time it was over. However, this was no dissimilar to your problem. When you talk about the projects, make sure that you are inviting guests who your daughter thinks she will like to have and who will like doing the projects. Also, build in a break or two where they can fool around, go outside, whatever, so that they are not "working" the whole time. The multiple projects are great, because the kids can move on to the next project when they are done with the first (which you cannot usually do at a craft store). BTW, this does not have to be expensive. We got pretty much everything from Michaels, online at Oriental Trading Company, and a dollar store.
If you feel like you want to overcome what just happened, how about suggesting a craft day for Valentines day?
Hang in there!
D.