If you're ok with taking baby #2 out, I would recommend having the party somewhere else. That way, you won't have to worry about cleaning the house and getting things ready.
Playworld Down Under does a good party and it is not too expensive for only 6 or 7 kids.
The Creative Discovery Museum does a great party but it is a little more pricey. However, the do provide cake (you get to pick the theme and they will decorate the cake accordingly), ice cream, paper products, drinks, and admission to the museum for up to 40 people (I think). They will even do the goody bags for an extra cost if you want. All you have to do is show up and have fun!
If you really want to have it at home, you could plan something around his favorite character. I had one friend who had a "drive in theatre" party for her 2 kids whose bdays were close together and in the fall. She showed the movie "Cars" on a sheet in the backyard and set up chairs and stuff for the kids to sit on. She rented a cotton candy machine and a popcorn machine for not much $.