As a Grandmother to three and mother of three, I can understand how frustrated you are with all this. One thing I can say is your mother in law knows your sister in laws children better and is closer to them for that reason. When my children were young we lived on a ranch with my inlaws and my children are very close to their paternal grandparents. My parents saw my children quite abit but they pretty much raised my brother's children and they are much closer to them. When my daughter once said to me that her cousins were so lucky since they pretty much live with grandma and grandpa, I pointed out that they aren't lucky since they have no special time with grandma and grandpa, they are much more fun as grandparents then parents and parenting is what they are doing with the cousins. My husbands sister has two children and they didn't go out to see my in laws much, always some reason not to do so. Her daughter grew up feeling jealous and slighted since my daughter was closer to grandma then she was. I blame my sister in law for this, she should have made sure that she stopped any jealousy at the beginning. She should have pointed out that her mom loves both girls very much and the reason she is closer to my daughter was because they were around each other more.
Now both my sons have children. My youngest son had my first grandchild and living here in the same town, I have babysat a lot. When my daughter in law started back to work after she was born I babysat. We spent a lot of time bonding and we are very very close. My oldest son adopted his step daughter who is 4 months older then my youngest sons daughter and also has a baby who was born in December. I don't get much time with these two children and haven't had the chance to bond with them to become as close as I am to my first grandchild. I have offered to take the kids or to go out and help with them and my daughter in law has always had some excuse for me not to come out. I finally figured I wasn't going to put myself out trying to get closer, just to take it as it comes. I also pointed out to my son that if he wants me to have the same relationship with his children as I have with his niece, he needs to make sure I have the chance. I love cuddling with my grandson and my adopted granddaughter is a sweetheart and so loving also. I do love them very much and have kept my adopted granddaughter over night but she is also a bit more wild and not always good at listening so sometimes when I do have her it wears me down.
Chances are, your mother in law is closer to her daughters children because she has had the chance to bond with them by helping out when they were babies. As you said, you don't do a lot without your daughter and haven't spent time away much, which is good, but also took away the bonding that grandma could have had watching her once a week for you.