Take that $1,000 and make donations to charities or organizations that are related to things in which the recipients are interested. Someone loves, loves, loves her dogs? Donation to her town's animal shelter (most will be delighted to get a check from you, just phone them for details). Someone has a mother-in-law who has cancer? Donation to the American Cancer Society in her honor. Daughter who likes expensive toys is at a school that needs funds for a new gym or whatever? You get the picture.
Oh, they'll squawk. Maybe quietly so they think they're not being rude, but they will raise their eyebrows and look you up and down like you're an alien for not giving Something I Can Unwrap. But if you put on the glow and a huge grin and say, "I knew you'd all appreciate paying forward the many benefits we all have so I chose each recipient charity especially because of connections to YOUR interests," they can just eat their disappointment, frankly.
YOU will know you helped a shelter, a medical charity, a school, whatever. Be sure to do big cards for each person with a note saying why you chose what you did. And then? Have that "nice dinner or some time with all of these people" where you host a family dinner yourself and let the wine flow.
If they are churlish about it --hey, you know what, next year, travel. Be gone during the holiday gift exchange. That breaks the pattern of the obligatory gifts to all cousins. Give your parents something and tell your kids the trip is their present from you and be gone.
Think of it: A thousand bucks doing good rather than sitting in a closet or on a shelf. And next year, a trip and time with your immediate family.
If you just can't do it, then I'd get everyone movie ticket cards, all the same, and be done. Then don't let next year slip by without telling everyone in about September that your family isn't doing the gift exchange. Be sure your husband and kids are on board because by now your kids are used to seeing this exchange. Oh....for the charity gifts, why not have your kids do the research on what charities to benefit?? That involves them and makes them see that maybe gifts dont' have to equal more stuff.
If my husband and daughter wanted expensive toys like you describe, they would get bookstore gift cards and maybe a handmade "certificate" promising a drive to the bookstore and dessert after they make their own personalized purchases. But nobody gets a $500 toy.
By the way, your wrapping prowess sounds like my late mom's! She made the most amazing packages with beautiful "toppers." Have you considered offering your wrapping services for pay at a mall to benefit a charity too? Most large stores here let groups and charities run gift-wrapping tables to earn money or ask for donations at the holidays.