I've thrown a huge number of parties, some with vendors, some all day affairs, most outdoor/indoor to the point we had alcohol sponsorships. Always did this for community building, ran it at a marginal loss (with donations and alcohol you can run big parties for the cost of drinking at a bar two or three times.)

Endless escalation of volume is easily addressed by having a live band(s) and allow silence between sets.

Graded participation, drinks near the loud focal point, seating back where it is quieter.

Multiple bands also naturally cause the party to restructure, a percentage of the attendees will know one of the bands and will cycle out when they play.

The real value of any party, the true multi year community building, is in the group setting the party up. It's not the audience it's the players. Make sure the players get recognition (not from the mic) or perks during the party, a different color wristband, an area only they get access to, a private drinks cache inside, they are volunteer helpers and helpers deserve to have a smooth night.

Don't make it a hassle to attend, don't be formal, have wristbands if kids will be attending. Don't make it about you or give a speech, have each band introduce the next with an MC to make sure it happens. Don't get talky on the microphone.

Be chill and perma ban anyone who can't handle their drinks, it only takes once. Make a giant crockpot or two of vegan chili. Cans of beans and jalapeño becomes ambrosia once you have a few drinks in you.