Alex,
Don't forget they didnt stop listening to music once they past the age of 20.
Assuming they're 80 years old their teen music experience would have been during and just after the war so there will be plenty of big band bop, ealry Frank Sinatra, Ink Spots, Andrews Sisters, Dick Haymes. These are the types of compilation CDs you can pick up in the high street for £1.99.
Their core music experience though would have continued through the 50's, 60's and probably until the 70's, early 80's so you should be well within your music collection other than the early stuff. There's plenty of dance material there.
I understand the comment about younger family being there but personally,as it's their event, I would stick to music of their era and would stay away from anything they are unlikely to enjoy.
Good luck, show us your playlist afterwards?
Teez