Setting the scene: Since bullfighting is a big part of the Spanish culture, use "matador capes" (or bolts of red fabric) as table cloths. Use traditional gaucho hats as decorations and even fake bullhorns as centerpieces. Set the mood with some classical guitar music.
Activities: One of the most popular and traditional art forms in Spain is flamenco dancing. Hire a group of dancers to perform for your friends—or better yet, bring in an instructor so you and your guests can learn the moves yourselves!
Food: What would a Spanish party be without tapas? The "little bites" are the perfect party finger food. For a main course, try seafood paella. And to sweeten the deal, créme caramel!
Drink: Wine, wine, wine...and sangria (also made with wine).
Party favor: Send you guests home with a CD of flamenco music, castanets and what else? Wine!