Apologies for the late return, we went for a hopefully labour inducing walk then I had a big nap 
Will try to answer everything.
It was said as a joke, I'm sure, but it wasn't sarcasm, it was in agreement with DN.
She would never be left alone with our baby though, they're not sensible people and could easily accidentally harm a baby. Things like giving hard boiled sweets to a 4mo baby is not beyond them.
I am actually worried about DN behaviour around our baby. He's not a bad kid, but emotionally he's been infantilised and obviously with what's been said to him and the way he's been encouraged to hate our baby before it's born, I wouldn't be surprised at him doing something in a tantrum. When my second niece was born my first would try to hit her and push her over, she was 2 though. This will be the first thing to ever detract attention away from him and I don't think he'll handle it well. He wasn't happy about the baby at all in the first place.
I am also aware that even if we have a boy, I will be fighting this, my son won't be raised to look down on girls, we are both in agreement that we don't want to teach our son to be a "proper boy" we don't do the whole "boys will be boys " "big boys don't cry" etc. And I will be battling just as much if our child is a girl or boy because it will be a constant fountain of sexist crap.
I'm also worried about being compared to DN, who is unsurprisingly, incredible at everything he does and I'm sure will have walked, talked, rode a bike before my child.
I won't allow a constant drip of any negativity towards my child, it is likely that even a son won't be good enough for them for the above reasons. I will give them a chance and I will shut them down, if it continues beyond our child understanding what they say, then they won't be around them, because even if I challenge every remark, they'll still hear it and it'll still hurt them. My grandma was very critical of me being not feminine enough, my mum was fiercely against her and did a great job of raising me to be comfortable in who I am, but I still remember it, and how it made me feel. So I won't allow it.
I know it's wierd how calm I feel about it, if I was reading my post I'd be mental, but it just seems very normal to have come from them. I will not allow my child to hear any of it though, but DH isn't ready to consider NC and I can hold my own and protect my child for a while and maybe they will learn to not say things like that. I'll protect my child though, please don't think I wont.