I want to make sure that I understand things correctly.
"My mother in law has had a bedroom in our house since I met my husband."
*** The house you live in now was your husband's before your marriage. His mom has always had an established bedroom there, since before you knew him.
"..she comes over and sleeps over every Wednesday...and every other weekend"
*** This sounds like she is on the same visitation schedule as your stepdaughter.
I get where you're coming from with this. I would lose my mind with this frequency of additional visiting people in my house. I don't even have a guest room, let alone a dedicated bedroom for a frequent flier.
To be perfectly honest, this would have been a dealbreaker for the relationship if I was in your shoes. I wouldn't have continued dating him. At a minimum, cohabitation and/or marriage never would have been on the table. I know myself well, and no matter how great he may be in other ways this is just too big of an incompatibility for a life with me.
The core problem is that you're not dealing with a situation that is new or surprising. You knew how things were going in. I don't know if it okay with you then and you've changed your mind now, or if you thought you would be able to change a long-established family arrangement. Either way, your influence is limited by the way the marriage was started.
Your husband has made it clear that he has no intention of changing things. The way your home life is today is how it is going to continue to be in the foreseeable future. Probably until your stepdaughter is an adult. Possibly if the visitation schedule changes or either your husband or MIL decide they need a change.
You have young kids, and they are your husband's kids too, correct? You could ask him to go to marriage counseling with you and try to find a place of compromise.
As for the sister moving to the downstairs apartment - if that was a unilateral decision by your husband without your input, I think that was wrong. Learning to work as a team would be a great topic for marriage counseling. It doesn't surprise me that the sister would move to be close, considering how close her brother and mother are.
If he won't do that, and you want to stay married, consider seeing a therapist on your own to see it you can put serious effort into learning to embrace this lifestyle that you chose to enter, so that you can also love it and be happy too. Your MIL and stepdaughter, in particular, are part of 'your own family'. You chose them when you chose him.