אנחנו מקשטות גם את המרפסת, כדי שהאורחים יראו איפה המסיבה.

Because אנחנו means we for both masculine and feminine speakers, but the verb form in the present tense shows gender.

• מקשטות = feminine plural
• מקשטים = masculine plural

So this sentence implies that the speakers are female. If the group were male or mixed, Hebrew would normally use אנחנו מקשטים.

Yes, it functions as the present-tense verb here.

In Hebrew, the present tense is usually built from forms that also behave somewhat like adjectives: they change for gender and number.

So you get patterns like:

• אני מקשטת = I decorate / I am decorating (female speaker)
• אני מקשט = I decorate / I am decorating (male speaker)
• אנחנו מקשטות = we decorate / we are decorating (female group)
• הם מקשטים = they decorate / they are decorating

So מקשטות is the normal present-tense form for a feminine plural subject.

Here את is the direct object marker. It does not mean with in this sentence.

Hebrew uses את before a definite direct object, usually one with ה־ (the) or another definite marker.

So:

• מקשטות מרפסת = decorating a balcony
• מקשטות את המרפסת = decorating the balcony

In English, this את is usually not translated at all.

Because ה־ is the Hebrew definite article, meaning the.

• מרפסת = a balcony
• המרפסת = the balcony

Since the sentence is talking about a specific balcony, Hebrew uses המרפסת. And because it is definite, it also takes the direct object marker את: את המרפסת.

Because גם means also / too, and it usually comes right before the thing it emphasizes.

Here:

• אנחנו מקשטות גם את המרפסת

means that the balcony too is being decorated.

So the focus is on the balcony as an additional thing being decorated.

If גם were placed elsewhere, the emphasis could shift slightly.

כדי by itself often means in order to.

When it is followed by a whole clause with its own subject and verb, Hebrew commonly uses כדי ש־, meaning so that / in order that.

Here:

• כדי שהאורחים יראו...
  = so that the guests will/can see...

So ש־ links כדי to the following clause.

This is normal Hebrew grammar.

After כדי ש־, Hebrew usually uses a future form to express purpose:

• כדי שהאורחים יראו = so that the guests will see / can see

Even though English might sometimes use can see or a different structure, Hebrew commonly uses the future here.

So יראו does not necessarily mean a simple future event; in this kind of sentence it often expresses the intended result or purpose.

Because the subject is האורחים = the guests, which is third person masculine plural.

So the matching future form is:

• הוא יראה = he will see
• הם יראו = they will see

Since אורחים is masculine plural, יראו is the correct agreement form.

If the subject were feminine plural, you would get a different form.

Because in Hebrew, the verb to be is usually not expressed in the present tense.

So:

• איפה המסיבה
  literally: where the party naturally means: where the party is

This is very common in Hebrew.

Compare:

• איפה המסיבה? = Where is the party?
• איפה הייתה המסיבה? = Where was the party?
• איפה תהיה המסיבה? = Where will the party be?

In past and future, Hebrew does use forms of to be, but in the present it usually leaves them out.

No. איפה is very common, especially in everyday speech.

Another common word is היכן, which also means where but can sound more formal or literary.

So:

• איפה המסיבה? = very natural, everyday Hebrew
• היכן המסיבה? = also correct, often a bit more formal

In this sentence, איפה sounds completely normal.