Generally, I would say that an offer that is made to an entire unit is not considered frat. For example, it is generally understood (at least in the circles that I have been floating in) that it would be acceptable for a division officer to invite his/her entire division to a party, since it does not display favoritism. Functions such as this can be used to build cohesion, though it is of course always safer if you attempt to build cohesion through a professionally oriented activity (unit PT etc.) How is frat divisive? Easy. When members of a unit perceive favoritism, it destroys morale and teamwork. When people fail to uphold the standards/rules and regs, it will likely lead to other breaches by other members of the unit. It's the whole "Well if Lt doesn't play by the rules, why should I be expected to?" mentality. An example I can recall involved a female midshipman who was dating (sleeping?) with a senior chief in her chain of command. Lo and behold, she was selected as a company commander, which did not sit well with her classmates, who believed other people were more qualified for the position. Morale was low, and she had forfitted all of her moral authority, making it more difficult to get anybody to comply with her orders/decisions.
Above all, remember that with frat, perception is reality. Even if you aren't technically fratting, if subordinates think you are, it's just as bad.