M.R.
I'm going to say in advance that you will probably not like my answer.
I think you are blaming your MIL for all normal childhood issues. Whether your 'baby' was with her or anyone else, I think you are being excessively controlling about napping and eating issues while you are away.
Eating and sleeping issues abound....just look at this site, whether it's SAHM or daycare or MIL watching over. The same questions resurface daily here.
She did raise the man you married, right? Are you OK with how he turned out or do you want to change everything about him?
I vote you allow her to have her own rhythm and relationship and rules with your child. I would never watch someone else's child with all those specifics to follow.
I recommend you put him to bed later, say 8pm at the earliest. How do you and dad have any time with him if he's in bed by 7 and you work? When does he see you? 12 hours in bed is a really long time.