L.P.
Wow... just wow...
That's such a touchy subject but you do marry the family too when it comes to Mexican (or Asian) families. I'm not saying my parents are THAT close but we do believe family is best to watch kids. The fact that they are creepily close to the kids is just cultural though. I honestly can't really relate (my parents love seeing the kids but at the end of the day they are very happy to have some quiet time).
My husband is white and I'm Asian. That said, I can relate to your husband and you to mine. Because of that, I will say that he needs to learn to understand YOUR culture just as much as you to his and it seems like his culture has won over and over again. Thing is, I didn't figure it out until the marriage was so bad that we broke up. At that point, we listened to each other for the first time and tried to understand the other person's perspective. When we were married, we just weren't willing to understand each other because we were always angry for one reason or another.
So my advice is to make him understand that what is normal to him can't define your whole marriage because then he's not willing to include what is normal to YOU. There has to be a compromise and to start, that compromise should be that his mother and father never talk in Spanish around you. My parents when addressing me when my husband was around was always in English. It's a sign of respect. He never demanded we do that, we just do because it's wrong to converse in another language and keep the other half of you out of the conversation.