Seems if they were being affected so deeply they would be weary of him and they absolutely are not.
I'm talking about them growing up with role models where true love isn't shown, dysfunctional relationships are the norm and how that affects them, maybe not today, but plays out in their lives tomorrow when they do themselves what they've grown up to believe is how people are.
We have a vacation scheduled at the end of this month to go home to Michigan <snip> So what do I do? How do I set boundaries here?
You already did set your boundaries when you stated to him "I see [my parents] just a couple of times a year for crying out loud ... they don't get to see the kids very often" and citing that as the very reasonable premise why you wish to stay with your folks.
So the problem is he doesn't respect your wishes and give them equal weight to his.
Personal story: My ex's dad lives in MI as well. That's where my ex is from. same thing with her: goes back a couple of times every year and we always stay with her dad. he has a guest room in the basement. I always felt that I was being whisked away 1000 miles to stay underground for ten days. My initial preference also was not to stay 24/7 with the in-laws. Jeez, I'd go nuts staying 24/7 with blood relatives, let alone in-laws. Anyhow, it was more important to her to stay there, so we stayed there every time.
Long story short, I found ways to get enjoyment out of it. I cooked a lot of the meals and they really loved my cooking, and that kept me busy, gave us yummy stuff to eat, and I got complimented which is always nice, and bonded some with them. It also made the foray into town on those occasions we got out that much more fun. Now I find I really do miss those times.
"Because we're a family" makes no sense to me... It's about not liking your in-laws, and the reason he doesn't like them is because he's a negative person and he's spewed some venom out, and he's probably embarrassed himself. But he did that to himself, it's not anyone's fault but his because he didn't watch his mouth.
Anyway, you keep to your guns, he has to respect your wishes and consider them. It's YOUR visit to YOUR family, after all. If he tries to drive a wedge or whatever he does, he alone is responsible for his behavior, don't get sucked into his theatrics and BS. Let him know that you're aware of what he's up to and tell him to stop it. Don't say more about it then that, don't get into discussion about it because he'll deny he's up to anything, and turn it around on you, and make the fault yours and all that stuff typical of his behavior.
Setting and maintaining boundaries is not the end all nor a magic pill. If someone doesn't respond to respecting reasonable requests and honoring boundaries, some tougher evaluations and actions need be made.