I feel that anyone with a 2 1/2 year old and a 1 year old shouldn't feel the need to spend Christmas or any holiday anywhere but at home, which is not what LW asked but which would considerably reduce the strain of the situation for everyone who is strain-able (grandparents excepted: they're adults who do not have excitable small children). The grandparents can stay in a nearby hotel and come over.

Apropos LW's question, this shifts the power dynamic to the children's parents' side and removes most opportunities for weird grandparent crap.