I’m not quite sure I understand who is actually paying for what in the OP. The future in laws want to OP to get the venue? As in pay for the venue? And they will pay for just the food? I don’t know of many places that separate the venue from the food. Unless it is at a religious hall, Veterans post etc. With the small amount of people that the OP expects, I doubly it will be someplace like that.
Or do the in laws expect the OP to pick & reserve a place, but they will pay for everything. They just don’t want to decide on a place??
And I agree, the rehearsal dinner (all aspects of it) is traditionally hosted by the grooms family. But in this day & age, anyone can pay for anything. Including the couple. It’s all about communication!