I can relate to what you are saying. It's very important, with quite dysfunctional parents, to let them know the boundaries. I find being incredibly repetitive helps: 'I'm sorry, that won't be possible' they ask again 'I'm sorry, we won't be doing that'. Decide what is reasonable for your family and stick to it even if they turn up the emotional blackmail.
As for inviting people over, my husband once arrived home to find my dad there with a friend in the house, (let himself in somehow). They didn't seem to realise it was my husband's home and that it would be polite to say 'can such and such come over later?' and then listen to the reply. They then asked my husband where the dinner was! My husband then decided that everyone had to stay in a B & B and not in our home for about a year, because they simply couldn't seem to understand basic boundaries like not inviting your (stranger to us) friends over when staying in someone else's house. This actually cured this behaviour, but I had to be very firm 'no, we are not having any overnight guests this year, the B & B is in XYZ street' and repeated this numerous times.
I think the key thing with difficult parents is to realise you don't have to please them, or explain things in great depth, or make them feel ok about things. Just decide what works for you and your husband and then get on with it.
As for the school play issue 'you didn't come last year, so I haven't got you tickets this year' is fine and don't promise the children they will come to avoid disappointment.
I still think my children, and even me, get a lot out of contact with their grandparents as they are very loving and generous, but have very poor boundaries (and personality issues etc) so I agree it is up to you as the more mature and sensible person to set them for them! And, it is a bit like having children!