I have been married for 10 1/2 years. I have spent those years trying to make everyone happy. My immediate family (DH and 2 DDs) never suffers. We always have a great time. I would never want to give up my time with my siblings. Nothing is more fun than getting together with my family and watching the kids play together and form bonds and realize how important family is. Those times comes at special times like Christmas, birthdays, other holidays, etc. They are wonderful memories that can't be forgotten.
With that said, I have now realized that I try to hard to hang onto that part of my family. They are still very important to me, and I will always try to get the family together. However, I need to put my family first. We need to have our traditions that include just the four of us. So, if I had the chance to go to WDW over Christmas with just my family, I wouldn't hestitate. The family will get over it.
Have you thought, though of going before Christmas when it's not so busy? They still have the celebration. We are going at the beginning of December. And, you can tell your SIL that your daugther will see plenty of Santa in WDW.