The venue for an event should be chosen based on what sort of an event it is and any associated themes. The venue could be anything you like, whether it's a loft, a flat, a hall, or a room.
A baby shower is a party customarily held for a mother-to-be not long before she gives birth. The tradition has its origins in Ancient Egypt. During the event, the mother-to-be is "showered" with gifts. These are mainly things for the child, including toys and clothes - especially if it is already clear whether the child will be a boy or a girl. The shower is often held in a place filled with soft furnishings and toys. In earlier times, only women were invited, and those experienced in motherhood in particular. Nowadays though, everybody is invited.