An administrative district (Landkreis) consists of several municipalities (Gemeinden). A municipality consists of several localities/built-up areas. Usually there is one town that has some administrative buildings, schools, shops etc. and several villages that hardly have such buildings. Officially, the villages are not even called villages, but "Ortsteile". When writing a letter, you can write the name of the town or village on the envelop - it does not make a difference. Each street name may only be used once per Gemeinde/postal code area so that each address is unambiguous. Therefore, Veronaville as a small village would not have a street called "Hauptstraße" because that name would be reserved for the main street of the town.
I know a few exceptions where municipalities only consist of villages without a town, but that is much less frequent than having a town. My home administrative district e.g. consists of about 25 municipalities and about 10 of these municipalities include a town, about 15 municipalities are so small that they are associated ("Verwaltungsgemeinschaft") with other, bigger municipalities and use their schools and parts of their administration and one municipality consisting just of villages (the biggest village is referred to as "Hauptort" on Wikipedia), but big enough to have a school.
Cities and bigger towns usually form an administrative unit of their own and are not part of a Landkreis. The term Großstadt (> 100 k inhabitants) is mainly used in statistical contexts. In everyday life, the term Stadt is used for all towns and cities. For smaller and medium-sized towns that are part of a Landkreis, it does not make a real difference whether they are called towns because the municipality is more important, but towns usually are proud to be towns and use that term when they describe themselves on their websites etc. In some German regions (not RLP), there even is another type of locality called "Markt". These localities never received town privileges, but they received the right to host markets. And even these localities usually are so proud of their status that they mention it and some even have included the word "Markt" as part of the placename.
Town privileges in Germany are not tied to the number of inhabitants either. The smallest town has about 300 inhabitants and the biggest municipality without a town has about 42 k inhabitants (the municipality consists of 19 separate localities/built-up areas is is very close to Hamburg). However, I assume that rulers in Germany were more open to granting town privileges due to the fact that there were so many states and domains existing in parallel. Villages were not really able to defend themselves while towns with a town wall had better chances and the inhabitants might have been more motivated to fight because they had more to lose in case of a defeat.
Density: I think I know what you mean. I know some towns with 10 k inhabitants that feel bigger than other towns with 30 k inhabitants, especially if the town center of the town with less inhabitants still has many old buildings. There are limits to this effect, however, because in a town with e.g. 70 k inhabitants, most buildings have more floors and you will have several high-rise buildings. And most towns of that size had more damage caused by the war and newer buildings as replacements so that the atmosphere is completely different.
Plants: I would look for plants that look like they are not from this world or the kind of plants that you could hallucinate after using the bubble blower for too long. Maybe look for some plants in unusual colors (blue or red) and use one color as main color for the garden with just a few highlights in other colors.
Tiles: I would use a similar or matching color for the tiles in the garden. I would use a bright color, but plain tiles without patterns.
Fence: As you plan to have a lush garden, my first idea is a wall instead of a fence. The wall should be of natural stones and could be covered with vine branches (RLP is a wine region) or ivy.
This also could work with a high fence and for a high fence you usually have wrought-iron for stability reasons. As the Summerdream family would not have a "normal" fence, I think that such a fence should have a non-metallic color and lots of "unneccessary" design details. Maybe something that would match this door or even more adorned: https://i.pinimg.com/originals/19/1...d56325830c9.jpg
If you want a more natural material, a picket fence also would be possible. The laths should not have a regular shape and should have slightly different heights. You can google for "Märchenzaun" to see some examples although these fences already look to regular because they were produced by companies.
Party rooms: Not deco suggestions, but I think that you should add the bubble blower somewhere. Maybe some functional alcohol CC (like the beer keg) also would be an option because in the play, the elves create chaos and make people fall in love. Of course, alcohol is not the same as magic, but the outcomes might be comparable.