L.C.
There is really only one way to be the 'neighbourhood' house: be the most welcoming to the energy and reality of children.
Not necessarily juice, but always having something to drink and something snack on (you'd be amazed how popular healthy, homemade simple cookies are), and lots of places that they're allowed to be (I have yet to meet a kid who wants to spend much time in a home where there are lots of shame-filled 'off limits' spaces, or kids are really only welcome to sit still, stay quiet or be in the basement)
My kids' friends never over-stayed their welcome, because I preferred to supervise my kids and knew that would be easier if they were at my house. So we had homemade popsicles (their fave flavours), lots of crackers and cheese, free access to the drinks (homemade lemonade, homemade iced tea, homemade ginger ale...), lots of fruit and welcoming them to stay for lunch or dinner (or both), play in any room in the house except mine, to hang out sitting on the counters or the floor in the kitchen, cook what they wanted to, rearrange the furniture and combine toys and games anyway they wanted to...
I never minded backtalk or sass, mostly because being all high strung about that never suited my laid-back style... and no child I've met yet managed to come up with anything really original (or anything I've never said myself). I have no difficulty pretending I'm deaf (or laughing at them) when their language got salty, and from time to time we'd discuss what those words or phrases mean. It's amazing how rarely younger kids will say something once they understand what it means... and teens have their own language which I found simpler to be curious about than trying to stop.
You may like to visit your neighbours, to see if you can see the difference in atmosphere and tone in that home. That might give you some ideas what you can change that will help your kids' friends feel more welcome.
I wonder if you would you make your friends clean up after dinner before they moved from the dining room into the living room for coffee and conversation? We often forget that when we're being hospitable to other children there isn't any difference (at least in their minds) between how they deserve to be treated and how you treat your friends... It's your home and it is your decision how to treat people in it... just as it is entirely up to them if they feel welcome in it.