Director Allan Dwan had just returned to Hollywood after three years living and working in England when he was invited to the MGM lot to watch the rough cut of "Hollywood Party." After watching what he later described as "thousands of feet of film, all disconnected stuff," Dwan was asked by Eddie Mannix, Louis B. Mayer's assistant, what he thought of it. Dwan said, "It's a nightmare" - and immediately Mayer seized on Dwan's comment and decided to make the main part of the film Jimmy Durante's dream. Dwan shot the beginning and ending framing sequences showing Durante falling asleep while waiting for his wife to get dressed for the party, and cast Durante's real-life wife as his wife in the film. Dwan worked "two or three days" on the project and got "a nice fat check." Though he wasn't credited, working on "Hollywood Party" helped him re-establish his reputation in Hollywood, where he'd been forgotten during the three years he'd spent in England.
For years the "Hot Choc'late Soldiers" animated sequence, created by Walt Disney Studios, could not be shown as part of "Hollywood Party" because in 1934 Disney had licensed only movie-theatre rights and had reserved the TV rights to the sequence for his own company. Finally, in 1992, Ted Turner's company, which then owned the rights to the MGM archive, settled with the Disney company and released a video version of the film containing "Hot Choc'late Soldiers."
In a 1933 press release, Clark Gable, Wallace Beery, and Buster Keaton were scheduled to film cameo appearances, while Jean Harlow, Nina Mae McKinney, and Joan Crawford were to perform musical numbers written by Rodgers & Hart ("Prayer", which later became "Blue Moon", "I'm One of the Boys", and "Black Diamond"). But none of this materialized. Crawford allegedly filmed her number, which was then cut, and was reinstated in Sadie McKee, where sources say it was also deleted.