First, seeing your GS on the internet is NOT the same as holding him in your arms and having a cuddle. I know that my parents enjoy watching our DCs on the webcam but they can not touch them, they cannot take part in their everyday life, they cannot put them to bed/in the bath.
I am so that your MIL tries to control your lives to such an extent.
My FIL is a bit like this, you reminded me of him when you mentioned that your MIL gives your food. FIL does this, the moment you are in the door he asked what you want to eat and drink. He always wants to give us food away with us. I feel that he shows his affection by feeding us, he really is a nice man, just rather controlling. We live far enough away that he does not really have a big influence in our lives, but he is very involved in SIL's life.
When we still lived in the same town, we tried to keep our distance from him and MIL as they would otherwise take over, as they have SILs life. They are involved in all of SILs major decisions, which car to buy, how to decorate the house...
It was difficult to make that step away from my PILs, they were a bit hurt by it, but at the end of the day my DH and I decided it had to be done.
Your DH has to realise that you and your DS are his family now, not MIL. His loyalty should be to you. MIL is now his extended family, iyswim, not that he loves her or respects her any less, but she should not be his first priority.