@Jennifer3217 One thing I would advise is for you to move your on-site host info up into your description introduction, rather than where it is now, as many guests do not read through everything.
They will then be well-aware they would see you out in the yard sometimes. Guests who want zero to do with the host, to the extent that they would be offended by a host waving or saying good morning, should not book a listing with a onsite host they share a yard with 🙂
As a home-share host, I take my cue from guests and don't find it that hard to tell if a guest welcomes interaction or prefers to keep to themselves.
I certainly wouldn't "ignore" a guest if I saw them out in the yard in your situation, neither would I feel the need to always wave or greet them. I had a guest who had stayed at a guesthouse just before staying with me, and said the host completely ignored her as she was walking back to the guesthouse, even though the host was out watering the garden and my guest had to walk right past her. My guest said that made her feel quite uncomfortable, as if the host resented her presence. So it's a matter of striking a balance between making a guest feel welcome and making them feel like the host is intrusive.
I wouldn't overthink it, but let it be an organic thing. If you're out in the yard busy and the guest is also outside doing their own thing, unless you make eye contact, both you and they might just go about your own business.
You may even find you have chatty guests who wander over to engage in conversation with you if they see you outside. Just play it by ear- there's no right or wrong with this stuff.
As far as decorating goes, some hosts do and some don't. Usually it's a good idea to ask when it comes to holidays like Christmas- as you say, not everyone celebrates the same way, or at all.
For something like a birthday or anniversary, I would keep an acknowledgement simple- you don't want to make a guest feel uncomfortable that you went into "over-the-top" mode when they just planned a quiet day and evening with their friend, sharing good food and a bottle of wine. A banner might be a bit much, a Happy Birthday helium ballon or a 'Welcome and happy birthday' card left on the table, seems about right to me.