The first time I had one of my grandsons "sleep over" he was 2 weeks old, his sister born 3 years later at 3 weeks, (both bottle fed) my daughter and SIL welcomed me taking them so they could have an evening to themselves. Kids have more fun with other kids around so we usually do it that way with a cousin, I sometimes have one alone but it's not the "norm."
No one takes care of our kids exactly as we do, and I admit I am guilty sometimes of giving my grandkids "junk" but if they have fun and aren't ruined for life what is the harm? And, a 3.5 y/o should be able to dress herself so could change out of her pj's if she wanted and not wait for the grandparents to do it. My guy turned 3 in April and changes out of his pj's every morning, has for months, he doesn't wait to be told to, so you can't really "blame" the grandparents on that one. And, heck, I sometimes don't brush my own hair if I'm not going anywhere out of the house...
Probably not what you wanted to hear but I've been around and been an in-law a loooooong time, and I would let him go and develop a relationship with his grandparents and cousin. And not sit home and ruminate but go have a good time with my husband ツ