We do Mass, so there is not a lot of socializing surrounding the Christmas Eve and Christmas services. However, with many of our Protestant friends, there is a big social component to the Christmas Eve service. This is a chance for your in-laws to introduce their beautiful grand baby to all their church friends. They think she is the most perfect, beautiful creature in the world and they want all their friends to know that all the bragging they have been doing the past 6 months is spot on
They aren't trying to convert her, or override your religious beliefs, they literally want to "show her off".
I would let your husband take her, and walk around the vestibule if she won't be quiet for the service. There will likely be a lot of music, which she might actually enjoy. Give her a chance to surprise you, and be grateful that they think this child is even more amazing than even you and your husband do.