Your husband is going to have to handle this with his mother, or you will be the bad guy.
He should let them know that any more than 5 toys (and we're not counting the boxes they put them in no matter how amusing they think they are) will remain at Grandma's house for the kids to play with when they visit.
He should let them know that the kids will be crying when the gifts don't come home with them, and that the kids will begin to view Grandma and Auntie and everyone else as just a gift supply source and not the wonderful nurturing relatives you two want for your kids. He should tell them he is NOT interested in raising spoiled, ungrateful kids who expect a gift every time they see someone, and so he will be cutting back the visits significantly.
Your kids are too little to understand donations right now, so that's not a great option - it's terrific for needy kids and daycare centers, but it's going to be a nightmare going forward.
Mainly, he needs to communicate to them that giving too many gifts is all about THEIR need to shop and feel important, and not about what's right for the children. He needs to be willing to put a stop to it when the 5th gift is opened.
Meantime, just pack what you can in the car and stop. Tell his parents there is no more room and that's the way it goes.
If they really want to do great things for their grandkids, they can start a college fund. THAT'S what your kids will need in 15 years, not an attitude of entitlement.
Good luck Mama, it's not easy to stand your ground with your husband's family.