I have done two of DS#2 birthday parties at McDonalds. I have never used their party service. As long as you are buying food their, they don't care (of course, check with your McDonald's). We even did a piñata there for his last birthday!! My oldest sis did the same thing for her DD#3.
I've heard that they really don't do anything but take the order, send out the cake and hand you the goody bags at a high price. When you do it yourself, you need to bring the cake and goody bags, take the order, and place it. Usually when you do a large order, they still send someone out to deliver.
What I did was type up a list of each kid and write the order down as they came in. When we had all the orders, we brought the sheet up to the counter, they ring it up and then hand it back. When the order arrived, I check it off the sheet, write the kids name on the bag and then set it at a table. You do not need to do anything else--no special plates, napkins, etc--they won't use them. It's free play and a meal with cake.
When I've had a baby at a birthday party, I do not let the party kids near the baby. I just tell the little ones that he's sleeping or needs a break right now. Very few are even interested; they are at a birthday party and that is where their interests lie. Have the baby in a front pack/sling or covered over in a stroller/car seat-stroller.
If you want something that is a little different, have you thought about rock climbing? Our Y does this as long as the kids are 5+. So do some gyms--even if you aren't a member. Our Y also does cooking birthday parties, and so do some restaurants and cooking schools. Our Y also offers arts & crafts parties. I've heard the community center does also. I'm sure places that do art classes do too. Places that do kids music (Kinder music) & exercise classes (My Gym, Gymboree, Kids in Action, JW Tumblers) also offer birthday parties, even for older kids. One of the martial art schools I know around here does parties with a martial arts sampler--kids seem to love that.