I made a similar event on Easter, last year though, not this year. The ''invitation'' to the event was some kind of costume that you can get from the event, be it bunny ears, pink dress or actually being a bunny. Then we competed in Thunder Bluff - jumping down to death and checking who gets closest to the target marked on the ground, closest people got two sandstone drakes and a bike mount for 3rd place. It was very fun
I think you should go as a dwarf, very santa-like. Also would encourage you to wrap stuff and randomize it, so people would get a random gift
As for location, I strongly recommend Ironforge or outside Ironforge. White, snowy, lovely area
HOLY S***. People just took all 250 of them i made. Didnt took more than 2h. I should probaly be ready with 500 for xmas.
Some people got 2 diferent enginering mounts and 1 more in those . (the ones that go for loads of gold)