We did an Elmo theme for Seth’s 2nd birthday.
I agree with Laura about the games. I had the pin the nose on Elmo game and we never even played it. The kids just wanted to be outside and/or playing with Seth’s toys. If it is nice out, I would just put things for the kids to do out there like bubbles, sidewalk chalk, balls, etc. For inside, the coloring sheets were a good idea and you could also have an Elmo’s World movie playing for the kid’s to watch. We’ve been to parties too that put the brown roll paper over the table where you could color and put stickers on it (you could get Elmo stickers).
For decorating, there is a ton of Elmo stuff out there at the party stores. If you really want to go all out, you could get a goldfish to be Dorothy (I thought of this for Seth’s party but did not do it but did put Goldfish snacks in the goody bags)!!
Have fun and Happy early B-day to Ashlynn!