I don't think your kids are missing out on big gatherings of grandkids when they're so little. Mine certainly wouldn't have had big sleepovers at that stage, even with loving grandparents. 7 kids all together with such little ones would be too much for the grandparents to cope with in my eyes.
Unfortunately I don't think you're ever going to get the relationship you thought you had with any of your inlaws. As someone who also thought they had a good relationship with their inlaws and had a massive shock when they showed their true feelings, our lives are now much happier for not having contact.
I understand that you're especially hurt because you treated SIL as a friend and she clearly wasn't. This is so much more about the type of people they are than the conflict itself. This situation was always going to arise at some point, so don't focus on the car seat incident as they were always going to challenge your decision making.
As someone who has always got on with most people I spent a lot of time agonising over what had happened and my part in it. Eventually I realised that they had an agenda that didn't include me. It was really hurtful as they'd been lovely to my face all the way through the relationship and I'd really put myself out to help them at various points.
My kids don''t have a relationship with them, and it's much easier. It took a few years for me to come to terms with it and not feel as though they were missing out because of me, but it helped that OH was in agreement and it was his decision to go NC.
I think in your shoes I'd just leave it now with SIL. I wouldn't allow any unsupervised contact between PIL and DC, and I'd probably discuss with your OH as to where and how they saw the kids.
Where and how do you feel most comfortable? Having them in your house? Meeting at a park? I would avoid having OH and kids at their house unless you are comfortable going too, as I am sure SIL will "pop round" to surreptitiously see your kids.
Agree a plan of action with your OH and grey rock anything else. Mute the whole family on social media so that you don't have to see any offensive or goady comments.
Ignore any comments about sleepovers and all the kids together at the grandparents. Have a neutral deflection ready - "oh, we don't feel they're old enough for that yet".
There must be another sibling of your husband's for there to be 7 grandchildren, how are they behaving? Can you have separate contact with them and their kids? SIL's kids are very likely to spout SIL's opinion to your kids as they get older, so low/NC with them isn't going to be a bad thing for your kids.
Good luck - it's hard and stressful, but once you have finalised your and DH's agreed plan then just stick to it and ignore all the comments. You will be much happier.