I'd probably just go, and take DH with me so I'd have a good time. We'd get a sitter for the kids and make a night/weekend of it. You're going to have a send a gift anyway, so you might as well go to the party. And I'd make sure we got a brunch invite.
I'd also consider saying something, but you want to keep the peace. People get very worked up about weddings.
I can understand how you must feel. My DD has a cousin the same age (4). Another SIL offered to take the cousin to dance class (pay for it, drive, etc.) but even though I was sitting right there, didn't offer to take DD. I kind of stewed about it for a while, but kept to myself. Well now, 3 months later, SIL is offering to take both girls so I was upset for nothing. I realize your situation is different, but with cousins so close in age it can be difficult.
I'd also consider saying something, but you want to keep the peace. People get very worked up about weddings.
I can understand how you must feel. My DD has a cousin the same age (4). Another SIL offered to take the cousin to dance class (pay for it, drive, etc.) but even though I was sitting right there, didn't offer to take DD. I kind of stewed about it for a while, but kept to myself. Well now, 3 months later, SIL is offering to take both girls so I was upset for nothing. I realize your situation is different, but with cousins so close in age it can be difficult.