You should think more about the singing/playing. For me, I do get very nervous but in a low-key situation, not as much, plus if I'm in even a small group, I feel much better. What about doing something where your FIL is cared for, either on your own or w/ some others, maybe from church? Do a selection of old-timey tunes everyone can sing along to?
-- Karen
P.S. - I've been pretty busy lately myself, not around in the evenings much or else on-line (so no phone).