Food: Chips & Salsa, A Taco Bar, Fajitas, Mexican Rice, Re-Fried Beans, Homemade Tortillas, Tamales, Guacamole, Flan...just to name a few...Mexican Food is so delicious!!
Having a Margarita bar would be nice as well.
Red, green & white streamers & colorful flowers would be a very simple and cute way of decorating...It would also be nice to add touches of maracas, chili peppers, cactuses & sombreros.
I think you should have a Salsa dancing contest & a pinata for the entertainment.
Hiring some Salsa Dancers or a Mariachi Band would also be a good form of entertainment.
As for the cupcakes, I think you should make Tres Leches ones. ❤