It's not unusual for workers to be less than 100% engaged in task work for the entire duration of the work day. Humans have a hard time focusing on one task for longer than 20 minutes without some form of interruption.
Research suggests that, out of an 8-hour day, on average, workers are productive for less than half.
In fact, reducing the total hours worked in a week can increase productivity in some circumstances.
This isn't an argument for "anything goes" or making drastic changes to your office hours without further investigation. But, a little variance in arrival times and some non-work activity occurring during work hours is not necessarily cause for alarm.
Clamping down in a draconian way to try to eliminate non-work activity may well backfire, leading to unhappy and burnt-out workers who are less productive or outright quit.
Instead, let your project milestones be your guide. If your workers are meeting the schedule goals that were established early on, then you'd seem to be on track. Refusing work over and above the agreed-upon schedule is a reasonable thing for a worker to do, and not necessarily a sign of slacking. TryIf you have more work than your scheduled bandwidth allows, try to incorporate this learning into planning for your next sprint/milestone/work unit, so you can prioritize the tasks or bring in additional helpers as needed.
If the project is falling behind schedule, that gives you a good, evidence-based way to raise the issue with your team, and work with them to find solutions to bring it back on track.
Studios I've worked at have for example instituted "focus afternoons" 2 days a week, in which we're requested to not schedule meetings, play videos in the background, or have conversations at desks where they might cause distractions, so everyone has a block of time they can count on to be uninterrupted.
Talk to your team about whether something like that might work for them, and involve them in the decision-making, so they feel like they're collaborators finding solutions together, not children being disciplined (nobody does their best work when they're feeling punished). Just knowing what's at stake and being empowered to help solve it may be enough to inspire your team to adjust their arrival times / focus to pick up the slack, if that's what's missing.