I voted for Saturday 4-8 but 5-9 is fine too. I try to avoid Friday night parties only because often people are tired and want Friday night for family time. And depending on age of kids, 7-9 may be late for some people. Starting at 4 or 5 gives people with young kids more flexibility.
At Joann Fabric, they have these cute crafts that are foam ornaments that are frames. One year, we hosted a cookie decorating contest and took a pic of each kid to put in the frames. It was a big hit.