Translation:Is everyone going to this party?
"Will everyone be going to this party?" Is a more accurate translation than "Is everyone going to this party?"
会 is used in this sentence to emphasize the "future action". Even though it literally means will, it can also be used to emphasize what one is "going to do next".
I was taught 会 denotes the ability to do something, not a desire or necessarily a future action. For instance, to me, 我会游泳, means "I am able to swim." Whereas, 我要游泳 is "I will swim." So I don't think 会 is appropriately used. I was taught mainland 北京话, maybe this usage is Taiwanese. Was anyone else taught the same as me?
Would "Are all of you going to the party?" be acceptable as well if you are talking to a group of people?
大家 = everyone. IF you're addressing a group you might say either "all of you" or "everyone" BUT the given sentence could be said to a single person asking if everyone is going, so I think you can see how your sentence doesn't work in this situation and therefore shouln't be accepted. We need to learn both 你们 and 大家.