We live in Countryside, about 20 minutes from downtown Chicago. Not too crowded, lots of nice little houses and lower taxes than the rest of the area. We moved here specifically for the school system.
My whole family is in Ohio, and I have often thought about how different life would be if we lived near them. My brother and his family have a HUGE, custom built house- that they built for only $200,000. My mom and dad and lots of other free babysitters are there ( I have no family out here at all) and all my old friends and cousins and their kids are there too.
Ultimately we have not moved because there isn't a job for me there or for my fiancee, but also because I am divorced and my ex would not want his son to move so far away. So I understand wanting to be where you are- but also thinking about things being easier somewhere else.
If you move back to MI, does your husband KNOW he will have his old job back? Make sure he has an offer in writing! Will you be able to get a job there as well? In these days, you do have to be practical and really look at what will be most affordable for YOUR family.
It's hard if you leave and your dad's feelings are hurt- but he was once a young man responsible for his own family and he should understand that your husband wants to do what is best to provide for you all.
My son is older now and flies on Southwest as an unaccompanied minor every summer to spend a few weeks with my mom and dad and his cousins. He loves it, and we have managed to keep very close and loving ties with people there. I know you want your kids to grow up with your family- but the other side is their family too!
You have to take a cold hard look at your finances, cost of living, the school situation,etc. and make the choice best for your kids. You can always visit your friends and family more if you move and use email and Facebook to keep in touch.
You don't want to stay in Chicago if you will always be struggling, have your kids in a bad school and create problems between you and your husband.
Be practical- is it more important for your kids to play with their cousins, or go to a good safe school? If your husband TRULY cannot find a job here (and Chicago has one of the very worst job/seeker ratios in the entire country right now) is it worth sacrificing his peace of mind and your family's financial security just so you can see your dad more often? At least your family HAS some options. A lot of families out there right now do not have even that! Do what will be best for EVERYONE in your family and it will work out all right!