Are your DH & his siblings/s afraid of their father?
Everything you've written suggests a family where FIL has always been overbearing, and intrusive.
Touching you, watching his grandson shower, putting things in your child's mouth, dictating what they eat.
Nobody seems allowed to have had any form of boundaries with this man.
Creepy as fuck. The point is, your instincts are shouting. You're uncomfortable, unhappy and worried.
So your husband should be standing between his father and his wife and child and saying NO.
But he hasn't clamped down on this behaviour or protected you from this man.
This isn't adult/adult behaviour, it's adult/child
This does suggest there's a lot going on here. I'd say end the visit as soon as possible, get yourselves away from him, then speak with your husband about his own childhood and just why you feel so uneasy about what's happening now. And limit future interactions.
Practice your own statements, get used to saying No, and do it.
I can't stand bullies.