If you raise your rates will you still attract clients? Are you confident that it will work? I renew my contracts once a year and that's when I make any changes, but if your contract doesn't have a renewal date then I would suggest sending out a letter to your current clients giving them 60 days notice that rates will be going up and tell them it is to keep up with the cost of living and the cost of food, don't explain any more than that.
I am lucky to have an entrance hallway at my front door so it is covered with all the things you mentioned including a bulletin board with my newsletter posted. People have mentioned before at interviews that they like that they can come into my home and see that I am dedicated to my daycare and proud to display the children's artwork. Also, our weather frog is on the wall out there and we change his clothes according to the weather. But I know a lot of people only want to have daycare things in their daycare room and I understand that too.
Don't compare yourself to anyone else. Do what you feel is best for you and advertise all your good points and point them out at interviews. We are all sooo very different.