Lets simplify this...over the years we FH teachers have made it clear. Yes, you can decorate for the Holidays. I don't want to sound crass, but this is clear; No baby Jesus, religious symbols. Leave off crosses, angels, manger scenes.
Music can be Holiday oriented, keep it strictly instrumental.
Residents can decorate inside their homes as they please. Have a policy of no religious symbols outside their doors or in their windows. That should be a year-round policy.
Lights, wreaths, trees, ornaments...just without religious reference.
For the blue and white theme, those are Jewish Holiday colors.
Yes, you can say Merry Christmas, personally I say Happy Holidays to include all.