As a mother who just threw a party for her 1-year-old, I can comment....
1. Making it through the first year is an amazing feat. I really can't expect anyone who doesn't have children to understand, but that first year of being a parent is THE HARDEST THING YOU HAVE EVER DONE OR EVER WILL DO (if you are doing it right). And it's not very easy on the kid either.
2. The fact is (most) people love babies and embrace any excuse to celebrate them. More people (adults) came to his birthday party than to my own birthday party... and that makes me happy because I want him to grow up surrounded by friends and family!
3. I wanted an excuse to have a party. After 1 year of being home everyday mothering a child, I needed some fun and social interaction for myself!
That being said, our 1-year-birthday party was a simple backyard barbecue with mostly adults in attendance, drinking margaritas and conversing. If they happened to have kids, they brought them, and I had some toys and games outside for them. And balloons. Kids love balloons, sidewalk chalk, and balls. Anything more is overkill. I also do not really understand the insane structured and 'kid-oriented' birthday parties for 1-year-olds.
Also, social interaction is VERY VERY VERY important for kids 0-3 years old. Second only to good nutrition. It's the time when the brain is doing the most. And the only way they learn is through observation and interaction. If they are at home all day with the same person, day in and day out, they aren't gonna learn much. It's not like you can teach them how to add and subtract or discuss philosophy yet. Heck, they don't even really 'play' with toys yet at age 1 - they study them and sometimes try to figure out how they work, but mostly they just want to chew on them.
But they learn TONS when watching social interactions. Watching their parents say please, thank you, hello, goodbye, and conversing with other people is much more beneficial than any 'baby einstein' product.
And they learn best from watching their peers. It's fact. I can spend all day trying to get my son to point to something in a book or interact with a toy in a certain way with no results, but as soon as he watches his friend do it, he's an expert. It's even better if the peer is a little bit older and more advanced - that's why second children hit their milestones and start speaking earlier than first children (in general)... they have someone more their size to interact with and learn from.
It also teaches them how to deal with life when things don't always go the way they want them to. If they spend too much time with only 1 or 2 people, they get "set in their ways"....This is the way mommy does it, so this is the way it must be done ALL THE TIME, etc. That's why kids are bratty these days - way too much "mommy time"! If they spend time with other people, they learn early in life that there are many ways of doing things, so they become less inclined to throw hissy fits if something is 'different'.
All of these reasons are why quality daycare and preschool are very important, IF you can afford them. (unfortunately our family cannot, so I try to get my son the interaction he needs in different ways - swimming lessons, visits to zoos, parks, malls, the Sideshow office, Comic-Con, going to parties, etc)
Not only that, kids who aren't placed in social situations and introduced to a plethora of new experiences during those early formative years tend to have much higher instances of depression, anxiety, weight issues and more.
So, yes, social interaction is ESSENTIAL for a developing 1-year-old!