We are assuming of course that you got a 2-B/R villa since there's 7 of you and the limit for a 1-B/R is 4 persons plus one child under 3, so I'm guessing you want to give the in-laws the 2nd B/R, keep the kids with you in the master, and not use the pull-out in the living room?
If you don't mind giving up the master, perhaps you could let the in-laws use that and the rest of you might fit a little more comfortably in the 2nd B/R. The 2-year old could sleep in the furnished crib, the other two could use the pull out sofa, and then you wouldn't need any air beds at all.