For my daughter's 5th birthday (August) we took advantage of our town pool and adjoining picnic area.  Guests gathered at a picnic table to do water color painting with water-themed stickers that got inserted into plastic mugs (available at craft stores).  We then played balloon and water games (trying to hit targets with squirt toys, water balloon toss, balloon stomp (tie balloons to each child's ankles and the last one with an intact balloon wins).  Cake and drinks (in new mugs) then off to the pool. Gave each kid a frozen water balloon with a prize inside. After removing the balloon part, the kids raced to see who could melt their ice ball first in the pool to get their prize. Swimming and goody bags (gummy sharks, Swedish fish, fish puzzle, stickers, and then their mug, water balloon prize, and squirt toy from the party).