A BBQ can be as cheap or expensive as you want it to be... asking ppl to bring chairs etc is more than acceptable, you want them to be comfortable.
We also had close family make some salads or favorite dessert to bring, ie. parents, SIL etc.

That big party BG was talking bout was for my DD, we had over 70 ppl attending as my DP's family tend to COMPLAIN if they are not invited to things so we said one big family do, my family & his all at once as i am PG with #2 and then from 2 onwards it's only ppl that see her all the time.
A lolly bag is not a must and we did not do games, we did lollies for kids over 3 with some small toys from the cheap shops, the 'baby bags' which BG's daughter got had a book with a little msg from my DD, some stickers, bubbles and a choccie for mummy :-)
Everything i bought was from the cheap shop and all up it cost me about $5 per child.
No-one expects gifts or lollies for young ones though so it's completely up to you.

Whatever you do have fun organising it, don't cut your nose off to spite your face...
And on the day please please remember to get someone to take some pics of people there, all i have is pics of DD opening pressies as the camera followed me and thats all i seemed to do... i should have gotten those cheap disposable cameras for ppl to play with...

And a cake.. it doesn't matter, a sponge cake or mud cake is awesome, you can even buy those edible pictures for on top, just whack one of those on... for MG i just bought a mud cake and put love heart and butterfly sprinkles on it