Why not rent a karaoke machine and have everyone sing. It is more fun if no one can sing.
We do this every fourth of July. We have a big dinner on the ground with grilling and then everyone who wants to sing, gets up. You would be amazed how good some can sound even if they haven't done it before.
As for the craft, why not make paper beads. There is a tute on here somewhere, telling you how it's done if you don't know. They are really easy to make even for a five year old. Cost is nothing but paper, glue and modge podge. String the beads on elastic cord and make bracelets. Have some little beads for the grown ups to put in between their paper beads, so they look prettier, and just tie them off when they are finished. No fasteners needed. These turn out really pretty enough to wear even if you are not a kid. Did I mention it would be cheap. Just collect your junk mail. The inside of some envelopes make very pretty beads as does a brown paper bag. Copy paper in various colors is great too.