Katie, I've had inlaw problems since before my husband and I were married. You know the show monster-in-law, that's mine only their is a father-in-law too. I also run a daycare out of my home.
Kids can play without someone constantly watching them and directing their play, the only time you need to help them is if someone is going to get hurt. They really need to learn to be independent and come up with their own fun. This way they will find their own ways to come up with fun things to do. Kids get a lot of satisfaction from that. I've watched kids that expect me to always find something for them to do. They don't have as much of an imagination as other kids, they don't have as much self esteem.
Now for the in-law. Honestly that's a hard one and still something that I struggle with. Be glad that she cared to ask why you were isolating yourself. Mines gotten to the point that none of the family will even talk to me at all. I think she means well by giving you the advice even though it was unsolicited. Nost parents think that kids need advice and they've been there and want to help. Some grand parents don't get that we are the parent and if we want their advice we will ask for it.
All you can do is tell her that you think differently about raising children and it is your child. Maybe at some point you can tell her that if you want her advice you'll ask for it.
But I really believe that she meant well by giving you this advice.