I think much of this is down to two things - a) you're a new parent b) cultural differences.
Similar to you - I'm of European and Indian heritage. My soon to be ex dh is Italian. Issues conceiving so when we did and it was the first grandchild for both families it was BIG issue.
My MIL from a very different culture and although I tried my best to draw boundaries, my DH didn't get it at all (or didn't want to get it, in my case). She flew over for 3 weeks and it was hard. I would not breastfeed in public or in front of anyone and that is my decision - partly cultural but also because I was an older mum with huge breasts the only way I could feed was lying on a bed. I let DH know this. His response was to give MIL the confidence to act how she wanted (see now, why he's soon to be ex DH). And she really did. I was underminded at every turn, no privacy and she'd invite her community over and talk to them about how difficult was to have such a bad mother for her grandson - in front of me - in my home.
MIL would not hand back DS for feeding and by the time she did, he was screaming with hunger, I'd have to find a private space in my own home and by then latching on was difficult as DS was having hysterics. I'd shut the bedroom door but then MIL would just throw it open and demand why DS was crying. Horrible. Also - baby in cot in our room, MIL would wonder in the middle of the night to gaze at DS and her shuffling would wake me. My milk dried up.
I think your DH is being a bit flippant re your discomfort with FIL watching you breastfeed. Your body - your rules - and I wouldn't let him just dismiss this with a mere 'it's a cultural difference'. Yes, it might be, but you must draw your boundaries.
Completely understand about the overstimulating - but don't forget they're probably hugely excited - although this doesn't help the tired parents!
My advice is this - you will be sensitive having just given birth. However, you're the mum and you do sound like you're trying to include everyone and that's brilliant, and you must also set your boundaries but in the nicest way you can. Your DH does need to understand your position. Two way communication is important.
Congrats on your first baby. Enjoy and try not to dwell too much on ILs. Be nice but ensure your boundaries are water tight.